NTC - AGM Information 2019 | FinancialReports.eu

Stock code: 4919

==> picture [158 x 21] intentionally omitted <==

(English Translation)

Nuvoton Technology Corporation

2019 Annual General Shareholders Meeting

Agenda Handbook[1]

Meeting Date: June 24, 2019 (Monday)

Meeting Time: 9:30 A.M.

Meeting Venue:Room 102, No. 4, Creation Rd. Ⅲ , Hsinchu Science Park, Taiwan, R.O.C.

1 This translation is for reference only. In the event of any discrepancy between the Chinese version and this translation, the Chinese version shall prevail.

I. Meeting Procedure and Agenda
II. Attachments
Attachment 1. 2018 Business Report and Financial Report
Attachment 2. Certified Public Accountants' Report
Attachment 3. Audit Committee's Review Report
Attachment 4. Shareholdings of All Directors of the Fifth Term
Attachment 5. Comparison Table of Amendments to Articles of Incorporation
Attachment 6. Comparison Table of Amendments to Procedures of Acquisition or Disposal of Assets and Full Text of the Procedures after Amendment
Attachment 7. Comparison Table of Amendments to Procedures for Engaging in Financial Derivatives Transactions and Full Text of the Procedures after Amendment
Attachment 8. Comparison Table of Amendments to Procedures for Endorsements and Guarantees and Full Text of the Procedures after Amendment
Attachment 9. Comparison Table of Amendments to Operating Procedures for Loaning of Funds and Full Text of the Procedures after Amendment
Attachment10. Comparison Table of Amendments to Rules of Procedures for Shareholders Meeting
Attachment11. Comparison Table of Amendments to Procedures for Election of Directors
Attachment12. List of Directors (including Independent Directors) Candidates
Attachment13. Explanations of Involvement of the Director in Acts for Himself or Others Which Fall into the Scope of the Company's Business
III. Appendixes
Appendix 1 Rules of Procedure for Shareholders Meeting (After Amendment)
Appendix 2 Procedures for Election of Directors (After Amendment) Appendix 3 Articles of Incorporation (After Amendment)

Meeting Procedure and Agenda of 2019 Annual General Shareholders Meeting of Nuvoton Technology Corporation

I. Announcement of the Opening of the Meeting
II. Opening Speech of the Chairman
III. Meeting Agenda
(I) Matters to be reported
1. To report the business of fiscal year 2018
2. To report the Audit Committee's review of 2018 final accounts
3. To report the distribution of the remuneration of employees and directors for fiscal year 2018
4. Other matters to be reported
(II) Matters to be recognized and discussed and election of directors
1. To recognize business report and financial report of fiscal year 2018
2. To recognize the proposal for distribution of 2018 profit
3. To discuss the amendments to the Articles of Incorporation
4. To discuss the amendments of the rules of the Company
  - (1) Procedures of Acquisition or Disposal of Assets
  - (2) Procedures for Engaging in Financial Derivatives Transactions
  - (3) Regulations Governing Endorsements and Guarantees, renamed as "Operating Procedures for Endorsements and Guarantees"
  - (4) Operating Procedures for Loaning of Funds
  - (5) Rules of Procedures for Shareholders Meeting
  - (6) Procedures for Election of Directors

Voting by poll for Motions No.1~4.

Election of Directors of sixth term.

Election via voting by poll.

To discuss the release of the Director from the non-competition restriction

Voting by poll for Motion No.6

IV. Other Matters and Motions
V. Adjournment

Matters to be reported:

I. To report the business of fiscal year 2018

The Company's 2018 business report and financial report are hereby presented (please refer to Attachment 1). Please examine.

II. To report the Audit Committee's review of 2018 final accounts

The Audit Committee's Review Report is hereby presented (please refer to Attachment 3). Please examine.

III. To report the distribution of the remuneration of employees and directors for fiscal year 2018

According to the Company's 2018 earnings audited by the certified public accountants, the Company has no accumulated losses to be offset against earnings. It is proposed to, in accordance with Article 24-1 of the Company's Articles of Incorporation, allot 1% of the earnings to be the remuneration of directors, which is NT$8,404,703 in total, and allot 6% of the earnings to be the remuneration of employees, which is NT$50,428,220 in total. The above amounts will all be paid in cash. The aforesaid ratios and amounts for allocation have been approved by the Remuneration Committee and the Board of Directors.

IV. Other matters to be reported

(I) Report on shareholdings of all directors
According to Article 26 of the Securities and Exchange Act and the Rules and Review Procedures for Share Ownership Ratios of Directors and Supervisors of Public Companies, the minimum combined shareholding of all directors required should be 12,000,000 shares. The Company has set up an Audit Committee and thus the requirement on the minimum shareholdings of all supervisors is not applicable.
Please refer to Attachment 4 for the shareholding of each director and the shareholdings of all directors as of the record date for determining the shareholders eligible to attend this 2019 annul general shareholders meeting.
The aggregate shareholdings of all directors meet the minimum shareholding required by laws and regulations.
(II) During the period for accepting shareholders' proposals (from April 12, 2019 to April 22, 2019), no shareholders submitted any written proposal to the Company for the 2019 annual general shareholders meeting in accordance with Article 172-1 of the Company Act.

Matters to be recognized, discussed and election of Directors

Motion I Proposed by the Board of Directors

Proposal: The business report and financial report of fiscal year 2018 are hereby presented. Please acknowledge and recognize the same.

Explanation:

Please refer to Attachment 1 for the business report and financial report of fiscal year 2018.
The aforementioned financial report had been approved by the Fourteenth Meeting of the Board of Directors of the Fifth Term and after audited by the certified public accountants, together with the business report, has been submitted to and reviewed by the Audit Committee.

Motion II Proposed by the Board of Directors

Proposal: The proposal for distribution of 2018 profit of the Company is presented. Please acknowledge and recognize the same.

Explanation:

The Company has a net profit after tax of NT$710,633,362 for the year of 2018. The proposed statement of profit distribution is as follows.
The proposal was approved by the Fourteenth Meeting of the Board of Directors of the Fifth Term.

Nuvoton Technology Corporation

Statement of Profit Distribution

For the year ended December 31, 2018

(Unit: NT$)

Items	Total
Undistributed Surplus Earnings of Previous Fiscal Years Plus: Adjustment on initial application of IFRS 9. Plus: Disposals of investments in equity instruments at fair value through other comprehensive income. Plus: Adjustment made to retained earnings for investments under the equity method Equity Method Minus: Losses on remeasurement of defined benefit plans Plus: Net Income of 2018	308,314,499 493,000 3,228,100 2,585,205 (69,908,000) 710,633,362
Minus: 10% legal reserve appropriated	(71,063,336)
Retained Earnings Available for Distribution as of December 31,	884,282,830
Distributable items: Cash Dividends to Common Shares (NT$2.5 per share)(Note)	(518,886,000)
Undistributed earnings, End of Year	365,396,830

(Note: Cash dividends will be calculated and distributed in whole New Taiwan Dollar. Any fractional amount less than one New Taiwan Dollar will be accounted in the Company's other income.)

Chairman: Arthur Yu-Cheng Chiao Manager: Sean Tai Accounting Officer: Hung-Wen, Huang

Motion III

Proposed by the Board of Directors

Proposal: It is proposed to amend certain provisions of the Articles of Incorporation of the Company. Please review and approve the same.

Explanation:

It is proposed to amend the Company's Articles of Incorporation to conform to the amendment to the Company Act which loosens the scope of employees entitled to receive employee reward and remuneration and the procedure for distributing dividends, and based on the Company's actual operational needs.
Please see Attachment 5 to this handbook for the comparison table showing the amendments and Appendix 3 for the full text of the Articles of Incorporation after amendment.

Motion VI

Proposed by the Board of Directors

Proposal: It is proposed to amend the rules of the Company. Please review and approve the same.

Explanation:

The rules of the Company are amended as follows:
(1) Procedures of Acquisition or Disposal of Assets
(a) These procedures are amended based on the letter dated November 26, 2018 (Ref. No.: JinGuan-Jeng-Fa-Tze-1070341072) issued by the Financial Supervisory Commission and the Company's actual needs.
(b) Major amendments to the Company’s Procedures of Acquisition or Disposal of Assets are as follows:
- i. Right-of-use assets are included in the scope of assets to conform to IFRS 16.
- ii. The scope of derivatives products is specified to conform to IFRS 9.
- iii Negative qualifications of outside experts are specified, the items to be evaluated and examined by outside experts and the items to be covered by their statements are specified to conform to IFRS 9.

iv. The approval procedure is revised based on actual operating needs.

(c) Please refer to Attachment 6 for the comparison table of the articles proposed to be amended in these procedures and the full text of these procedures after amendment.
(2) Procedures for Engaging in Financial Derivatives Transactions
(a) These procedures are amended to specify the scope of derivatives products to conform to IFRS 9 according to the letter dated November 26, 2018 (Ref. No.: Jin-Guan-Jeng-Fa-Tze1070341072) issued by the Financial Supervisory Commission, and based on the Company's actual needs.
(b) Please refer to Attachment 7 for the comparison table of the articles proposed to be amended in these procedures and the full text of these procedures after amendment.
(3) Regulations Governing Endorsements and Guarantees, renamed as Operating Procedures for Endorsements and Guarantees
(a) These procedures are amended to strengthen the Company's corporate governance according to the letter dated March 7, 2019 (Ref. No.: Jin-Guan-Jeng-Shung-Tze-1080304826) issued by the Financial Supervisory Commission and based on the Company's actual needs.
(b) Please refer to Attachment 8 for the comparison table of the articles proposed to be amended in

these procedures and the full text of these procedures after amendment.

(4) Operating Procedures for Loaning of Funds
(a) These procedures are amended to increase the flexibility in internal funds allocation and use of group companies and strengthen the Company's corporate governance according to the letter dated March 7, 2019 (Ref. No.: Jin-Guan-Jeng-Shung-Tze-1080304826) issued by the Financial Supervisory Commission and based on the Company's actual needs.
(b) Please refer to Attachment 9 for the comparison table of the articles proposed to be amended in these procedures and the full text of these procedures after amendment.
(5) Rules of Procedures for Shareholders Meeting
(a) These procedures are amended to conform to the amendments to the Company Act which requires certain proposals for convening shareholders meeting should be enumerated, and the main contents of such proposals should be explained, in the convention notice of shareholders meeting.
(b) Please refer to Attachment 10 for the comparison table of the articles proposed to be amended in these rules and Appendix 1 for the full text of the Rules of Procedures for Shareholders Meeting after amendment.
(6) Procedures for Election of Directors
(a) These procedures are amended to conform to the amendments to the Company Act which simplifies the nomination process.
(b) Please refer to Attachment 11 for the comparison table of the articles proposed to be amended in these procedures and Appendix 2 for the full text of the Procedures for Election of Directors after amendment.
This proposal has been approved by the Board of Directors.

Voting by Poll for Motion No. 1~4 of the above recognized and discussed matters:

Motion V Election of Directors Proposed by the Board of Directors

Proposal: Election of directors (including independent directors) of the sixth term of the Company

Explanation:

The directors (including independent directors) of the fifth term were elected at the annual general shareholders' meeting on June 15, 2016 and their term of office expired on June 14, 2019. Since

the annual general shareholders' meeting of this year will be held on June 24, 2019, according to Paragraph 2 of Article 195 of the Company Act, in case no election of new directors is effected after expiration of the term of office of existing directors, the term of office of directors shall be extended until the time new directors have been elected and assumed their office. Given that the term of office of the fifth-term directors (including independent directors) has expired, it is proposed to elect all the directors (including the independent directors) of the sixth term.

According to Article 15 of the Articles of Incorporation, the Company has nine directors and the number of independent directors should not be less than three. According to the ruling of the Ministry of Economic Affairs dated November 30, 2015 (Ref. No.: Jing-Shan-Tze-09402426290), the Board of Directors resolved and passed that the total number of the directors (including the independent directors) of the sixth term shall be nine (inclusive of four independent directors), and the newly-elected directors (including the independent directors) will take office after the 2019 annual general shareholders' meeting (and their term of office is from June 24, 2019 to June 23, 2022).
The Company’s directors (including independent directors) of the sixth term shall be elected according to the candidate nomination system and procedures. The list of director (including independent directors) candidates for this election has been approved by the Fifteenth Meeting of the Board of Directors of the Fifth Term. Please refer to Attachment 12 to this handbook for information on the candidates.
Please vote.

Election results `：`

Motion VI

Proposed by the Board of Directors

Proposal: It is proposed to release the director from the non-competition restrictions. Please review and approve the same.

Explanation:

It is conducted in accordance with Paragraph 1 of Article 209 of the Company Act.
Please refer to Attachment 13 to this handbook for the description of competitive conduct of the newly elected directors of the sixth term and the directors of the fifth term of the Company who concurrently act as directors or managers in other companies engaging in the same business as the Company.
It is proposed to the shareholders meeting, in accordance with Paragraph 1 of Article 209 of the

Company Act, to release the newly elected directors' of the sixth term from the non-competition restrictions starting from the day such directors enter office as the Company's directors, and to release the director(s) of the fifth term from the non-competition restriction starting from the day when such director(s) become the director(s) or manager(s) of other companies that engages in the same business as the Company, and to waive the Company's right to request disgorgement of profits against such director(s) from the day when the director(s) entered office as the director(s) or manager(s) of those companies.

Voting by Poll for the Above Motion:

Other Matters and Motions

Adjournment

Attachments

< Attachment 1>

Nuvoton Technology Corporation 2018 Business Report

2018 has been a year of stable growth for Nuvoton and we have achieved great results in revenue and profitability again. The global semiconductor market benefited from expansions in the applications of wireless communications, information industry, automotive electronics, high-performance computing, Internet of Things, and artificial intelligence. Despite headwinds from the United States and China trade disputes, overall demand continued to increase and help facilitate growth in the semiconductor industry.

Financial Performance

The overall financial results show that, the total consolidated revenue for 2018 was NT$10,040 million with an annual growth rate of 8.71%; the net profit after tax was NT$711 million with an annual growth rate of 3.27%; the earnings per share after tax was NT$3.42.

Products, Markets and Technological Developments

The Company's scope of business mainly includes research and development and sales of IC and semiconductor foundry services. Important achievements are described below:

Nuvoton created a customer-centric microcontroller ecosystem, which includes a wide range of platform products, and related software and hardware for development, debugging, and mass production, to fully satisfy the needs of customers at all stages. In addition to the successful development of high performance NuMicro® M480 series – Arm Cortex®-M4 microcontroller with secure boot function and hardware cryptography, we collaborated with SEGGER to provide embedded emWin GUI software, and launched NuMicro® M2351 Series TrustZone® empowered microcontroller focusing on IoT security. We launched the new generation of voice products N589 series, targeting the market of intelligent interactive toy application, built-in 8-bit core high-quality voice and music synthesizer, and the audio MCU and audio CODEC components have also been successfully adopted by customers, showing the Company's products and innovative applications are recognized by users around the world.

The BMC( Baseboard Management Controller), supported by the OpenBMC open source firmware of OCP (Open Compute Project), which can share the OCP members' BMC firmware development results and exert powerful computing performance. Regarding TPM( Trusted Platform Module) , we partnered with OnBoard Security, an American software company, to promote trust computing and jointly market the hardware and the software total solutions for IoT to ensure their applications are protected from the threat of malicious hacker attacks. With the highest level of hardware TPM2.0 security certification, we expect to achieve great results in the future.

For the foundry services, Nuvoton continued to cultivate the power market in 2018. In addition to

processes that range from 3.3V to 40V, a number of high-voltage processes including 60V/80V/120V/250V/600V/700V have been gradually developed to expand the range of the Company's services in power market, while also enhance the competitiveness of customers' products.

Honors and Awards

Nuvoton has achieved great results in its main business and we also won multiple honors and awards. Our safety and health management personnel received the "Excellent Occupational Safety and Health Promotion Performance" award from the Hsinchu Science Park Administration in 2018 which affirmed Nuvoton's commitment to occupational safety. In terms of long-term corporate goals for sustainable development of the environment, we have actively reduced power consumption in the factory and received the "Energy Conservation Elite" from the Ministry of Economic Affairs. The wastewater treatment personnel also received the "Outstanding Environmental Protection Personnel" award from the Hsinchu Science Park Administration. These results demonstrated our commitments to corporate social responsibilities and conservation of the Earth's resources.

Enterprise Business and Expectations

New advanced technologies rely on strong functionalities of semiconductors from wireless communication artificial intelligence, big data, IoT, smart cities, smart medicine, to cloud computing. In the future, Nuvoton shall uphold its global development strategy, steadily strengthen capabilities to research and development, and continue to develop more product applications and services, and market more innovative applications and services by cooperating with our clients. We believe that the Company shall explore more business opportunities to maximize the values for our shareholders, clients, and employees.

Finally, on behalf of Nuvoton Technology Corp., we'd like to thank all our shareholders for your support and affirmation.

Chairman: Arthur Yu-Cheng Chiao President: Sean Tai Accounting Manager: Hung-Wen, Huang

NUVOTON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss, current (Notes 4 and 7) Notes and accounts receivable, net (Notes 4 and 8) Accounts receivable due from related parties, net (Notes 4, 8 and 27) Other receivables (Notes 9 and 27) Inventories (Notes 4 and 10) Other current assets (Note 24) Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income, non-current (Notes 4 and 11) Available-for-sale financial assets, non-current (Notes 4 and 12) Financial assets measured at cost, non-current (Notes 4 and 13) Property, plant and equipment (Notes 4 and 14) Investment properties (Notes 4 and 15) Intangible assets (Notes 4 and 16) Deferred income tax assets (Notes 4 and 21) Refundable deposits paid (Note 6) Other non-current assets (Note 24) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payable Other payables (Notes 17 and 26) Current tax liabilities (Notes 4 and 21) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Products guarantee based on commitment (Note 4) Accrued pension liabilities (Notes 4 and 18) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT Share capital (Note 19) Capital surplus Additional paid-in capital Employee share options Retained earnings Legal reserve Unappropriated earnings Exchange differences on translation of foreign operations (Notes 4 and 19) Unrealized gains (losses) on financial asset at fair value through other comprehensive income (Notes 4 and 19) Unrealized gains (losses) on available-for-sale financial assets (Notes 4 and 19) Total equity TOTAL		2018 Amount % $ 1,543,918 25 763 - 934,777 15 62,306 1 181,397 3 1,560,938 26 173,760 3 4,457,859 73 539,283 9 - - - - 697,917 11 50,527 1 144,754 2 109,790 2 81,435 1 36,103 1 1,659,809 27 $ 6,117,668 100 $ 888,700 15 878,329 14 84,963 1 63,186 1 1,915,178 31 101,891 2 294,427 5 71,806 1 468,124 8 2,383,302 39 2,075,544 34 63,485 1 13 - 470,659 8 955,346 15 (10,535) - 179,854 3 - - 3,734,366 61 $ 6,117,668 100		2017
				Amount % $ 1,417,029 23 1,710 - 743,264 12 51,114 1 376,245 6 1,634,318 26 225,732 4 4,449,412 72 - - 289,789 5 301,493 5 642,663 10 56,278 1 203,612 3 95,318 2 71,571 1 38,696 1 1,699,420 28 $ 6,148,832 100 $ 934,901 15 874,942 14 88,934 2 88,549 1 1,987,326 32 101,891 2 306,107 5 90,547 1 498,545 8 2,485,871 40 2,075,544 34 63,485 1 13 - 401,846 6 896,014 15 (165) - - - 226,224 4 3,662,961 60 $ 6,148,832 100

The accompanying notes are an integral part of the consolidated financial statements.

NUVOTON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Note 20) OPERATING COST GROSS PROFIT OPERATING EXPENSES Selling expenses General and administrative expenses Research and development expenses Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND LOSSES Interest income Dividend income Other gains and losses Gains (losses) on disposal of property, plant and equipment Foreign exchange gains (losses) Gains (losses) on financial instruments at fair value through profit or loss Total non-operating income and losses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 21) NET PROFIT		2018 Amount % $ 10,040,221 100 6,127,054 61 3,913,167 39 235,538 3 398,485 4 2,524,485 25 3,158,508 32 754,659 7 12,105 - 73,322 1 7,516 - 1,254 - 20,475 - (30,411) - 84,261 1 838,920 8 (128,287) (1) 710,633 7		2017
				Amount % $ 9,235,382 100 5,502,875 60 3,732,507 40 223,903 3 407,029 4 2,388,012 26 3,018,944 33 713,563 7 13,197 - 65,216 1 5,380 - 638 - (3,894) - 5,331 - 85,868 1 799,431 8 (111,298) (1) 688,133 7 (Continued)

NUVOTON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE INCOME (LOSSES) Items that will not be reclassified subsequently to profit or loss Remeasurement of defined benefit plans (Notes 4 and 18) Unrealized gains (losses) on investments in equity instruments at fair value through other comprehensive income Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations Unrealized gains (losses) on available-for-sale financial assets Other comprehensive income (loss) TOTAL COMPREHENSIVE INCOME EARNINGS PER SHARE (Notes 4 and 23) From continuing operations Basic Diluted		2018 Amount % $ (67,323) (1) (196,160) (2) (10,370) - - - (273,853) (3) $ 436,780 4 $ 3.42 $ 3.40		2017
				Amount % $ (18,946) - - - (29,445) - 142,876 1 94,485 1 $ 782,618 8 $ 3.32 $ 3.30

		$		$

The accompanying notes are an integral part of the consolidated financial statements.

(Concluded)

NUVOTON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

BALANCE, JANUARY 1, 2017 Net profit in 2017 Other comprehensive income (loss) in 2017 Total comprehensive income (loss) in 2017 Appropriation of 2016 earnings (Note 19) Legal reserve Cash dividends BALANCE, DECEMBER 31, 2017 Adjustment on initial application of IFRS 9 (Note 3) BALANCE, JANUARY 1, 2018 AFTER ADJUSTMENTS Net profit in 2018 Other comprehensive income (loss) in 2018 Total comprehensive income (loss) in 2018 Appropriation of 2017 earnings (Note 19) Legal reserve Cash dividends Disposals of investments in equity instruments at fair value through other comprehensive income (Notes 11 and 19) BALANCE, DECEMBER 31, 2018		Equity Attributable to Owners of the Parent Other Equity Exchange Differences on Unrealized Gain (Losses) on Financial Assets at Fair Value Unrealized Gain (Losses) on Capital Surplus Retained Earnings Translation of Through Other Available-for- Additional Employee Unappropriated Foreign Comprehensive sale Financial Paid-in Capital Share Options Legal Reserve Earnings Operations Income Assets $ 63,485 $ 13 $ 340,530 $ 786,274 $ 29,280 $ - $ 83,348 - - - 688,133 - - - - - - (18,946) (29,445) - 142,876 - - - 669,187 (29,445) - 142,876 - - 61,316 (61,316) - - - - - - (498,131) - - - 63,485 13 401,846 896,014 (165) - 226,224 - - - 493 - 379,242 (226,224) 63,485 13 401,846 896,507 (165) 379,242 - - - - 710,633 - - - - - - (67,323) (10,370) (196,160) - - - - 643,310 (10,370) (196,160) - - - 68,813 (68,813) - - - - - - (518,886) - - - - - - 3,228 - (3,228) - $ 63,485 $ 13 $ 470,659 $ 955,346 $ (10,535) $ 179,854 $ -	Equity Attributable to Owners of the Parent Other Equity Exchange Differences on Unrealized Gain (Losses) on Financial Assets at Fair Value Unrealized Gain (Losses) on Capital Surplus Retained Earnings Translation of Through Other Available-for- Additional Employee Unappropriated Foreign Comprehensive sale Financial Paid-in Capital Share Options Legal Reserve Earnings Operations Income Assets $ 63,485 $ 13 $ 340,530 $ 786,274 $ 29,280 $ - $ 83,348 - - - 688,133 - - - - - - (18,946) (29,445) - 142,876 - - - 669,187 (29,445) - 142,876 - - 61,316 (61,316) - - - - - - (498,131) - - - 63,485 13 401,846 896,014 (165) - 226,224 - - - 493 - 379,242 (226,224) 63,485 13 401,846 896,507 (165) 379,242 - - - - 710,633 - - - - - - (67,323) (10,370) (196,160) - - - - 643,310 (10,370) (196,160) - - - 68,813 (68,813) - - - - - - (518,886) - - - - - - 3,228 - (3,228) - $ 63,485 $ 13 $ 470,659 $ 955,346 $ (10,535) $ 179,854 $ -	Total Equity $ 3,378,474 688,133 94,485 782,618 - (498,131) 3,662,961 153,511 3,816,472 710,633 (273,853) 436,780 - (518,886) - $ 3,734,366
	Share Capital $ 2,075,544 - - - - - 2,075,544 - 2,075,544 - - - - - - $ 2,075,544	Capital Surplus Additional Employee Paid-in Capital Share Options $ 63,485 $ 13 - - - - - - - - - - 63,485 13 - - 63,485 13 - - - - - - - - - - - - $ 63,485 $ 13	Retained Earnings Unappropriated Legal Reserve Earnings $ 340,530 $ 786,274 - 688,133 - (18,946) - 669,187 61,316 (61,316) - (498,131) 401,846 896,014 - 493 401,846 896,507 - 710,633 - (67,323) - 643,310 68,813 (68,813) - (518,886) - 3,228 $ 470,659 $ 955,346

The accompanying notes are an integral part of the consolidated financial statements.

NUVOTON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before income tax Adjustments for: Depreciation expense Amortization expense Expected credit loss recognized (reversed) on accounts receivables (Reversal of) provision for allowance for doubtful accounts Interest income Dividend income Net (gain) loss on fair value change of financial assets and liabilities designated as at fair value through profit or loss (Gain) loss on disposal of property, plant and equipment Changes in operating assets and liabilities (Increase) decrease in notes and accounts receivable (Increase) decrease in accounts receivable due from related parties (Increase) decrease in other receivables (Increase) decrease in inventories (Increase) decrease in other current assets (Increase) decrease in other non-current assets Increase (decrease) in accounts payable Increase (decrease) in other payables Increase (decrease) in other current liabilities Increase (decrease) on accrued pension liabilities Increase (decrease) in other non-current liabilities Cash generated from operations Income tax paid Interest received Dividend received Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of intangible assets Proceeds from disposal of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets measured at cost Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) decrease in refundable deposits paid Net cash used in investing activities	2018 $ 838,920 164,001 86,807 3,855 - (12,105) (73,322) 947 (1,254) (195,624) (11,192) 194,234 73,380 51,972 2,593 (46,201) (30,619) (25,363) (79,003) (8,190) 933,836 (146,907) 12,896 73,322 873,147 (23,855) 5,850 3,500 - (198,466) 1,941 (9,864) (220,894)	2017 $ 799,431 155,125 88,233 - 66 (13,197) (65,216) (2,417) (638) 26,579 5,949 (132,070) (455,881) (2,851) 2,802 28,359 (18,538) (19,964) (64,877) (13,233) 317,662 (23,466) 19,478 65,216 378,890 (45,111) - - 4,000 (291,937) 915 (900) (333,033) (Continued)

NUVOTON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM FINANCING ACTIVITIES Cash dividends EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR	2018 $ (518,886) (6,478) 126,889 1,417,029 $ 1,543,918	2017 $ (498,131) (29,524) (481,798) 1,898,827 $ 1,417,029

The accompanying notes are an integral part of the consolidated financial statements.

(Concluded)

NUVOTON TECHNOLOGY CORPORATION

BALANCE SHEETS DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss, current (Notes 4 and 7) Notes and accounts receivable, net (Notes 4 and 8) Accounts receivable due from related parties, net (Notes 4, 8 and 25) Other receivables (Notes 6 and 25) Inventories (Notes 4 and 9) Other current assets (Note 22) Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income, non-current (Notes 4 and 10) Available-for-sale financial assets, non-current (Notes 4 and 11) Financial assets measured at cost, non-current (Notes 4 and 12) Investments accounted for using equity method (Notes 4 and 13) Property, plant and equipment (Notes 4 and 14) Intangible assets (Notes 4 and 15) Deferred income tax assets (Notes 4 and 19) Refundable deposits paid (Note 6) Other non-current assets (Note 22) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payable Other payables (Notes 16 and 25) Current tax liabilities (Notes 4 and 19) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Products guarantee based on commitment (Note 4) Accrued pension liabilities (Notes 4 and 17) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY Share capital (Note 18) Capital surplus Additional paid-in capital Employee share options Retained earnings Legal reserve Unappropriated earnings Exchange differences on translation of foreign operations (Notes 4 and 18) Unrealized gains (losses) on financial assets at fair value through other comprehensive income (Notes 4 and 18) Unrealized gains (losses) on available-for-sale financial assets (Notes 4 and 18) Total equity TOTAL		2018 Amount % $ 960,293 16 763 - 602,000 10 332,028 5 28,016 - 1,557,510 26 162,333 3 3,642,943 60 493,166 8 - - - - 1,009,874 17 612,248 10 122,967 2 80,000 1 75,707 1 35,129 1 2,429,091 40 $ 6,072,034 100 $ 888,249 15 917,252 15 83,748 1 52,093 1 1,941,342 32 101,891 1 292,862 5 1,573 - 396,326 6 2,337,668 38 2,075,544 34 63,485 1 13 - 470,659 8 955,346 16 (10,535) - 179,854 3 - - 3,734,366 62 $ 6,072,034 100		2017
				Amount % $ 607,505 10 1,710 - 542,941 9 228,732 4 346,972 6 1,625,931 27 215,110 3 3,568,901 59 - - 183,199 3 301,493 5 1,137,627 19 569,765 9 163,499 3 67,000 1 65,737 1 37,510 - 2,525,830 41 $ 6,094,731 100 $ 934,066 16 923,354 15 73,283 1 77,446 1 2,008,149 33 101,891 2 302,086 5 19,644 - 423,621 7 2,431,770 40 2,075,544 34 63,485 1 13 - 401,846 6 896,014 15 (165) - - - 226,224 4 3,662,961 60 $ 6,094,731 100

The accompanying notes are an integral part of the financial statements.

NUVOTON TECHNOLOGY CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE OPERATING COST GROSS PROFIT OPERATING EXPENSES Selling expenses General and administrative expenses Research and development expenses Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND LOSSES Share of profit of subsidiaries accounted for using equity method Interest income Dividend income Other gains and losses Gains (losses) on disposal of property, plant and equipment Foreign exchange gains (losses) Gains (losses) on financial instruments at fair value through profit or loss Total non-operating income and losses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 19) NET PROFIT (Continued)		2018 Amount % $ 9,798,594 100 6,116,544 63 3,682,050 37 148,532 1 370,922 4 2,457,238 25 2,976,692 30 705,358 7 17,004 - 6,624 - 67,547 1 470 - 1,163 - 13,882 - (30,411) - 76,279 1 781,637 8 (71,004) (1) 710,633 7		2017
				Amount % $ 9,000,394 100 5,490,445 61 3,509,949 39 136,536 1 381,513 4 2,323,442 26 2,841,491 31 668,458 8 27,940 - 6,057 - 60,266 1 83 - 905 - (3,952) - 5,331 - 96,630 1 765,088 9 (76,955) (1) 688,133 8

NUVOTON TECHNOLOGY CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE INCOME (LOSSES) Items that will not be reclassified subsequently to profit or loss Remeasurement of defined benefit plans (Notes 4 and 17) Unrealized gains (losses) on investment in equity instruments at fair value through other comprehensive income Share of other comprehensive income(loss) of subsidiaries accounted for using equity method Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations Unrealized gains (losses) on available-for-sale financial assets Share of comprehensive income of subsidiaries accounted for using equity method Other comprehensive income (loss) TOTAL COMPREHENSIVE INCOME EARNINGS PER SHARE (Notes 4 and 21) From continuing operations Basic Diluted		2018 Amount % $ (69,908) (1) (135,687) (1) (57,888) (1) (10,370) - - - - - (273,853) (3) $ 436,780 4 $ 3.42 $ 3.40		2017
				Amount % $ (21,978) - - - 3,032 - (29,445) - 90,323 1 52,553 - 94,485 1 $ 782,618 9 $ 3.32 $ 3.30

		$		$

The accompanying notes are an integral part of the financial statements.

(Concluded)

NUVOTON TECHNOLOGY CORPORATION

STATEMENT OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars)

Share Capital BALANCE, JANUARY 1, 2017 $ 2,075,544 Net profit in 2017 - Other comprehensive income (loss) in 2017 - Total comprehensive income (loss) in 2017 - Appropriation of 2016 earnings (Note 18) Legal reserve - Cash dividends - BALANCE, DECEMBER 31, 2017 2,075,544 Adjustment on initial application of IFRS 9 (Note 3) - BALANCE, JANUARY 1, 2018 AFTER ADJUSTMENTS 2,075,544 Net profit in 2018 - Other comprehensive income (loss) in 2018 - Total comprehensive income (loss) in 2018 - Appropriation of 2017 earnings (Note 18) Legal reserve - Cash dividends - Disposals of investments in equity instruments at fair value through other comprehensive income (Notes 10 and 18) - BALANCE, DECEMBER 31, 2018 $ 2,075,544	Capital Surplus Additional Paid-in Capital Employee Share Options $ 63,485 $ 13 - - - - - - - - - - 63,485 13 - - 63,485 13 - - - - - - - - - - - - $ 63,485 $ 13	Retained Earnings Legal Reserve Unappropriated Earnings $ 340,530 $ 786,274 - 688,133 - (18,946) - 669,187 61,316 (61,316) - (498,131) 401,846 896,014 - 493 401,846 896,507 - 710,633 - (67,323) - 643,310 68,813 (68,813) - (518,886) - 3,228 $ 470,659 $ 955,346	Other Equity Exchange Differences on Translation Unrealized Gain (Losses) on Financial Assets at Fair Value Through Other Unrealized Gain (Losses) on Available- for- of Foreign Operations Comprehensive Income sale Financial Assets $ 29,280 $ - $ 83,348 - - - (29,445) - 142,876 (29,445) - 142,876 - - - - - - (165) - 226,224 - 379,242 (226,224) (165) 379,242 - - - - (10,370) (196,160) - (10,370) (196,160) - - - - - - - - (3,228) - $ (10,535) $ 179,854 $ -	Total Equity $ 3,378,474 688,133 94,485 782,618 - (498,131) 3,662,961 153,511 3,816,472 710,633 (273,853) 436,780 - (518,886) - $ 3,734,366

The accompanying notes are an integral part of the financial statements.

NUVOTON TECHNOLOGY CORPORATION

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax

Adjustments for:
Depreciation expense
Amortization expense
Expected credit loss recognized (reversed) on accounts receivables
(Reversal of) provision for allowance for doubtful accounts
Interest income
Dividend income
Share of profit of subsidiaries accounted for using equity method
Unrealized gain or loss
Net (gain) loss on fair value change of financial assets and liabilities
designated as at fair value through profit or loss
(Gain) loss on disposal of property, plant and equipment
Changes in operating assets and liabilities
(Increase) decrease in notes and accounts receivable
(Increase) decrease in accounts receivable due from related parties
(Increase) decrease in other receivables
(Increase) decrease in inventories
(Increase) decrease in other current assets
(Increase) decrease in other non-current assets
Increase (decrease) in accounts payable
Increase (decrease) in other payables
Increase (decrease) in other current liabilities
Increase (decrease) on accrued pension liabilities
Increase (decrease) in other non-current liabilities

Cash generated from (used in) operations
Income tax paid
Interest received
Dividends received

Net cash generated from (used in) operating activities

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of intangible assets
Proceeds from disposal of financial assets at fair value through other
comprehensive income
Proceeds from capital reduction of financial assets at fair value through
other comprehensive income
Proceeds from capital reduction of financial assets measured at cost
Acquisition of investment accounted for using equity method

2018
2017
$ 781,637
$ 765,088
140,681
132,392
68,518
72,988
1,403
-
-
1,609
(6,624)
(6,057)
(67,547)
(60,266)
(17,004)
(27,940)
673
(310)
947
(2,417)
(1,163)
(905)
(60,462)
(72,104)

(103,296)
(87,969)
318,924
(320,893)
68,421
(456,962)
52,777
(5,253)
2,381
2,382
(45,817)
29,580
(49,635)
(3,761)
(25,353)
(19,454)
(79,132)
(69,709)
(7,520)

7,243
972,809
(122,718)
(73,539)
(14,781)
6,656
6,534
67,547

60,266
973,473

(70,699)
(23,750)
(22,025)
5,850
-
3,500
-
-
4,000
-
(2,072)
(Continued)

NUVOTON TECHNOLOGY CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

Proceeds from capital reduction of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) decrease in refundable deposits paid Net cash generated from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Cash dividends NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR	2018 $ 75,826 (154,894) 1,639 (9,970) (101,799) (518,886) 352,788 607,505 $ 960,293	2017 $ - (263,518) 915 (856) (283,556) (498,131) (852,386) 1,459,891 $ 607,505

The accompanying notes are an integral part of the financial statements.

(Concluded)

< Attachment 2>

==> picture [469 x 125] intentionally omitted <==

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Nuvoton Technology Corporation

Opinion

We have audited the accompanying consolidated financial statements of Nuvoton Technology Corporation and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of December 31, 2018 and 2017, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2018 and 2017, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2018. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Validity of sales revenues

There is significant risk of revenue recognition. In addition, customers’ line of credits are highly correlated to delivery of products and recognition of sales revenue. We therefore considered that the validity of sales revenue from the twenty largest customers with changes in credit lines and temporary increase in credit lines in 2018 as a key audit matter for 2018. Refer to Note 4 to the consolidated financial statements for the Group’s revenue recognition policies.

Our audit procedures in response to the validity of sales revenue included understanding the design and the implementation of internal control of sales revenue and selecting samples of revenue items to ensure the occurrence of transactions.

Other Matter

We have also audited the parent company only financial statements of Nuvoton Technology Corporation as of and for the years ended December 31, 2018 and 2017 on which we have issued an unmodified opinion.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including members of the audit committee) are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with statements that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2017 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we

determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Hung-Bin Yu and Kenny Hong.

==> picture [197 x 55] intentionally omitted <==

Deloitte & Touche Taipei, Taiwan Republic of China February 1, 2019

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

Chinese version or any difference in the interpretation of the two versions, the Chinese-language

independent auditors’ report and consolidated financial statements shall prevail.

==> picture [469 x 124] intentionally omitted <==

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Nuvoton Technology Corporation

Opinion

We have audited the accompanying financial statements of Nuvoton Technology Corporation (the Company), which comprise the balance sheets as of December 31, 2018 and 2017, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2018. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Validity of Sales Revenues

There is significant risk of revenue recognition. In addition, customers’ line of credits are highly correlated to delivery of products and recognition of sales revenue. We therefore considered that the validity of sales revenue from the twenty largest customers with changes in credit lines and temporary increase in credit lines in 2018 is a key audit matter for 2018. Refer to Note 4 to the financial statements for the Company’s revenue recognition policies.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including members of the audit committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2018 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a

matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Hung-Bin Yu and Kenny Hong.

==> picture [197 x 54] intentionally omitted <==

Deloitte & Touche Taipei, Taiwan Republic of China February 1, 2019

Notice to Readers

The accompanying financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and financial statements shall prevail.

< Attachment 3>

Review Report by Audit Committee

The Board of Directors has prepared the Company’s 2018 Business Report, financial statements (including consolidated financial statements) and profit distribution proposal. The Board of Directors had engaged CPA Hung-Bin Yu and CPA Kenny Hong from Deloitte & Touche to audit the financial statements, who issued an audited report containing an unqualified opinion. The above business report, financial statements and profit distribution proposal have been examined by the Audit Committee and are considered by the Audit Committee to be in conformity with the requirements. We hereby report as above in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act. Please review the same.

2018 Annual General Shareholders Meeting of Nuvoton Technology Corporation

Convener of the Audit Committee: Allen Hsu

Date: February 1, 2019

Nuvoton Technology Corporation Shareholdings of All Directors of the Fifth Term[2]

			April 26,2019
Title	Name	Current shareholding (Number of Shares)	Shareholding ratio (%)
Chairman	Winbond Electronics Corporation Representative: Arthur Yu- ChengChiao	126,620,087 shares	61.01%
Vice Chairman	Robert Hsu	152,328 shares	0.07%
Director	YungChin	0	0.00%
Director	Ken-Shew Lu	0	0.00%
Director	Chi-Lin Wea	0	0.00%
Independent Director	Royce Yu-Chun Hong	0	0.00%
Independent Director	Allen Hsu	0	0.00%
Independent Director	David Shu-Chyuan Tu	0	0.00%
Independent Director	Jerry Hsu	0	0.00%
Shareholdings of All Directors		126,772,415 shares	61.08%

Note: (1) The Company has a total of 207,554,400 issued shares as of April 26, 2019. Shareholdings of all directors are 126,772,415 shares and are in compliance with Article 26 of the Securities and Exchange Act.

(2) The Company has set up the Audit Committee and thus the requirement on the minimum shareholdings of all supervisors is not applicable.

2 This translation is for reference only. In the event of any discrepancy between the Chinese version and this translation, the Chinese version shall prevail.

< Attachment 5>

NUVOTON TECHNOLOGY CORPORATION Comparison Table of Amendments to the Articles of Incorporation

Article After Amendment	Article Before Amendment	Article Before Amendment	Note
Article 8 The shares issued by the Company may be in scripless form and without physical certificates,but the Company shall register the shares with the central securities depositary institution.	Article 8 ~~Sh tifit f th C hll b i~~		The wording of this article is slightly revised to conform to the provisions of Article 161-2 of the Company Act and the practical needs.
	~~ares cercaes o e ompany sa e n~~ ~~itd f d hll b id ld~~
	~~regsere orm an sa e sgne or seae~~ ~~b t lt th dit d th b itd~~
	~~y a eas ree recors an en e prne~~ ~~i th f td b th t~~
	~~n e orm as requese y e governmen~~ ~~thit d b lll thtitd bf~~
	~~auory an e egay auencae eore~~ ~~bi id i d ith l d~~
	~~eng ssue~~ ~~lti~~	~~n accorance w aws an~~ ~~I~~n the case where issuance of
	~~reguaons.~~ shares does
		not require issuing of share
	certificates, shares with institution.	the Company shall register the the central securities depositary
Article 15 The Company shall have nine directors, whose term of office is three years. Among the directors there should be not less than three independent directors. Election of directors shall adopt the candidates nomination system prescribed in Article 192-1 of the Company Act. All of the directors are elected by the shareholders meeting from the candidate list of directors and are eligible for re-election. Independent and non-independent directors shall be elected at the same time, but the quota shall be calculated separately. The method of candidate nomination and election of directors shall conform to the Company Act, the Securities and Exchange Act, and other relevant rules and regulations. Theprofessional qualifications, requirements relating to shareholdings, restrictions on concurrentpositions held,and other	Article 15 The Company shall have nine directors, whose term of office is three years. Among the directors there should be not less than three independent directors. Election of directors shall adopt the candidates nomination system prescribed in Article 192-1 of the Company Act. All of the directors are elected by the shareholders meeting from the candidate list of directors and are eligible for re-election. Independent and non-independent directors shall be elected at the same time, but the quota shall be calculated separately. The method of candidate nomination and election of directors, professional qualifications, requirements relating to shareholdings, restrictions on concurrent positions held, and other compliance matters with respect to independent directors shall conform to~~the~~ ~~C At th Siti d Eh~~		The wording of this article is revised to conform to the wording used in relevant laws and regulations.
	~~ompany c, e ecures an xcange~~ ~~Act, and~~other relevant rules and regulations. The board of directors may resolve to

Article After Amendment	Article Before Amendment	Note
compliance matters with respect to independent directors shall conform to relevant rules and regulations. The board of directors may resolve to purchase liability insurance for directors of the Company.	purchase liability insurance for directors of the Company.
Article 17 Except as otherwise provided by law, meetings of the Board of Directors are convened by the Chairman of the Board of Directors. When convening a meeting of the Board of Directors, a meeting notice specifying the reasons for convening such meeting shall be sent to each director within the period prescribed by the competent authority in charge of securities lawsprior to the meeting; provided that a meeting may be convened at any time in case of emergency. The meeting notice set forth in the preceding paragraph may be in writing or e-mail or by fax. Unless otherwise provided by law, resolutions adopted at a meeting of the Board of Directors must be approved by a majority vote of the directors being present, who shall represent no less than half of the total number of directors. Directors may designate other directors as their proxies to attend the meetings of the Board of Directors; provided that each director may act as proxy for one other director only. The Board of Directors shall meet at least once every three months.	Article 17 Meetings of the Board of Directors are convened by the Chairman of the Board of Directors. When convening a meeting of the Board of Directors, a meeting notice specifying the reasons for convening such meeting shall be sent to each directors~~seven~~ ~~days prior to the meeting;~~provided that a meeting may be convened at any time in case of emergency. The meeting notice set forth in the preceding paragraph may be in writing or e-mail or by fax. Unless otherwise provided by law, resolutions adopted at a meeting of the Board of Directors must be approved by a majority vote of the directors being present, who shall represent no less than half of the total number of directors. Directors may designate other directors as their proxies to attend the meetings of the Board of Directors; provided that each director may act as proxy for one other director only. The Board of Directors shall meet at least once every three months.	Certain wording is added and revised to conform to Article 203-1 of the Company Act.
(Deleted)	~~Article 24-1~~ ~~If th C h t fit 1% f~~	The original article is moved to Article
	~~e ompany as ne pro, or more o~~ ~~th tfit hll b lltd ti~~
	~~e nepro sa e aocae as remuneraon~~

Article After Amendment	Article Before Amendment	Note
	~~f l d 1% l ti~~	25 and this article is deleted.
	~~o empoyees an or ess as remuneraon~~ ~~f dit idd tht if th C h~~
	~~o recors; prove a e ompany as~~ ~~ltd l th C hll fit t~~
	~~accumuae osses, e ompany sa rs se~~ ~~aside an amount for making up losses.~~ ~~Th ti f l b~~
	~~e remuneraon o empoyees may e~~ ~~ditibtd i tk h lti f~~
	~~srue n soc or cas upon resouon o~~ ~~th it f th dit ti t~~
	~~e majory o e recors represenng wo~~ ~~thid f th dit f th Bd f Dit~~
	~~rs o e recors o e oar o recors,~~ ~~d hll b td t th hhld~~
	~~an sa e repore o e sareoers~~ ~~meeting of the Company.~~ ~~Th ti f l b~~
	~~e remuneraon o empoyees may e~~ ~~ditibtd t th l f bidii f~~
	~~srue o e empoyees o susares o~~ ~~th C ti ti iti Th~~
	~~e ompany meeng ceran crera. e~~ ~~Bd f Dit i thid t dti~~
	~~oar o recors s auorze o eermne~~ ~~th "l f bidii f th C~~
	~~e empoyees o susares o e ompany~~ ~~ti ti iti" b th Bd f~~
	~~meeng ceran crera aove or e oar o~~ ~~Dit thi th Chi f th~~
	~~recors may auorze e arman o e~~ ~~Bd f Dit t tif th "l f~~
	~~oar o recors o ray e empoyees o~~ ~~bidii f th C ti ti~~
	~~susares o e ompany meeng ceran~~ ~~criteria" set forth above.~~
Article 25	Article 25 ~~If th C h t fit t th d f~~	1. The original Article 24 is moved to this Article. 2. The original Article 25 is moved to Paragraph 1 of Article 26. 3. The wording was slightly revised to conform to Articles 167-1, 167-2, 235-1 and 267.
	~~e ompany as pre-ax pro a e en o~~ ~~th t fil ft i ll t~~
	~~e curren sca year, aer payng a axes~~ ~~d i ll ltd l th~~
	~~an coverng a accumuae osses, e~~ ~~C hll t id 10% f id i~~
	~~ompany sa se ase o sa earnngs~~ ~~ll H ll d~~
	~~as ega reserve. owever, ega reserve nee~~ ~~t b d h th ltd ll~~
	~~no e mae wen e accumuae ega~~ ~~l th idi itl f th~~
	~~reserve equas e pa-n capa o e~~ ~~C If th i ditibtbl fit~~
	~~ompany. ere s any sruae pro~~ ~~ft ti th bl f b d~~
	~~aer aggregang e aance o aove an~~ ~~ditibtd i f i~~
	~~unsrue earnngs o prevous years or~~ ~~ti th l f th t fil~~
	~~aggregang e osses o e curren sca year~~ ~~d ditibtd i f i~~
	~~an unsrue earnngs o prevous years,~~ ~~il hll b t id d~~
	~~speca reserve sa e se ase or reverse~~ ~~di t l d lti l f~~
	~~accorng o aws an reguaons or rues o~~ ~~tt thit If th i ii~~
	~~compeen auory. ere s any remanng~~ ~~t ft tti id il~~
	~~amoun, aer seng ase a speca reserve or~~ ~~tii ditibtd i Th Bd~~
	~~reanng as unsrue earnngs. e oar~~ ~~f Dit bit l f~~
	~~o recors may sum a proposa or~~ ~~llti f th ii bl d th~~
	~~aocaon o e remanng aance an e~~ ~~ltd ditibtd i t th~~
	~~accumuae unsrue earnngs o e~~

Article After Amendment	Article After Amendment	Article After Amendment	Article Before Amendment	Note
If the Company has net profit, 1% or more of the net profit shall be allocated as remuneration of employees and 1% or less as remuneration of directors; provided that if the Company has accumulated losses, the Company shall first set aside an amount for making up losses. The distribution of employeeand director remuneration shall be reported to the shareholders' meeting. The Company may purchase its shares for transferring such treasury shares,			~~hhld~~ ~~ti~~ ~~f~~ ~~lti~~
			~~sareoers~~ ~~meeng~~ ~~or~~ ~~resouon~~ ~~on~~ ~~ditibti~~ ~~b~~ ~~d~~ ~~diidd~~ ~~t~~
			~~srung~~ ~~onus~~ ~~an~~ ~~vens~~ ~~o~~ ~~hhld Th t f h diidd~~
			~~sareoers. e percenage o cas vens~~ ~~t hhld hll t b l th 10% f~~
			~~o sareoers sa no e ess an o~~ ~~the total amount of dividends to shareholders.~~
issue employee options, provide pre-
emptive right for employees'
subscription upon issuing new shares,
issue new restricted employee shares,
and distribute employee remuneration,
to those eligible	employeesof the controlling or
		who meet
Article 26 If the Company has pre-tax profit at the end of the current fiscal year, after			Article 26	1. The original Article 25 was moved to Paragraph 1 of this article.
paying all taxes and covering all
accumulated losses, the Company shall

Article After Amendment	Article After Amendment	Article Before Amendment	Note
set aside 10% of said earnings as legal		The Company's dividend distribution policy is made in accordance with the Company Act and the Articles of Incorporation in consideration of factors including capital and financial structure, operating status, retained earnings, industry characteristics and economic cycle. The dividends shall be distributed in a steadymanner.Distributable	2. The second part of the first paragraph of Article 25 was moved to Paragraph 3 of this article. 3. This article was amended to conform to Article 214 of the Company Act and its wording was slightly revised.
reserve. However, legal reserve need
not be made when the accumulated
legal reserve equals the paid-in capital
of the Company. If there is any distributable profit after aggregating	. If there is any
the balance of the above and
undistributed earnings of previous
years or after aggregating the losses of
the current fiscal year and
undistributed earnings of previous
years, special reserve shall be set aside
or reversed according to laws and
regulations or rules of competent
authority. If there is any remaining
amount, after setting aside a special
reserve or retaining an amount as
undistributed earnings, the Board of
Directors may submit a proposal for
allocation of the remaining balance
and the accumulated undistributed
earnings to the shareholders meeting
for resolution on distributing bonus
and dividends to shareholders. The Board of Directors shall be
authorized to distribute the profit, the
legal reserve and the capital reserve
mentioned in the preceding paragraph
in cash upon resolution by a majority
vote at a board meeting attended by
two-thirds or more of the directors, and
shall report the same to the
shareholders’meeting. The Company's dividend distribution policy is made in accordance with the Company Act and the Articles of Incorporation in consideration of factors including capital and financial structure, operating status, earnings, industry characteristics and economic cycle. The dividends shall be

Article After Amendment Article Before Amendment Note distributed in a steady manner. earnings may be retained undistributed or Distributable earnings may be retained distributed in cash dividend or the undistributed or distributed in cash combination of stock dividend and cash dividend or the combination of stock dividend, so as to maintain sustainable dividend and cash dividend, so as to management and development. With respect maintain sustainable management and to distribution of dividends, in consideration development. With respect to of future operating scale and cash flow distribution of dividends, in requirements, no less than 50% of the consideration of future operating scale remaining amount of the net profit after tax of and cash flow requirements, no less the current year, after covering the than 50% of the remaining amount of accumulative losses and setting aside the legal the net profit after tax of the current reserve and the special reserve, shall be year, after covering the accumulative distributed to shareholders as dividends. The losses and setting aside the legal conditions, timing, amounts and types of reserve and the special reserve, shall be retained earnings and distribution of dividends distributed to shareholders as may be adjusted on proper occasions based on dividends, and the percentage of cash the needs to deal with changes in economic dividends to shareholders shall not be and industrial trends and in view of the less than 10% of the total amount of Company's future development needs and dividends to shareholders. The profitability. conditions, timing, amounts and types of retained earnings and distribution of dividends may be adjusted on proper occasions based on the needs to deal with changes in economic and industrial trends and in view of the Company's future development needs and profitability. Article 29 Article 29 Date of this These Articles of Incorporation were These Articles of Incorporation were enacted amendment was added. enacted on March 14, 2008. on March 14, 2008. The first amendment was made on The first amendment was made on September September 1, 2008. 1, 2008. The second amendment was made on The second amendment was made on November 17, 2009. November 17, 2009. The third amendment was made on The third amendment was made on June 10, June 10, 2011. 2011. The fourth amendment was made on The fourth amendment was made on June 5, June 5, 2012. 2012.

Article After Amendment	Article Before Amendment	Note
The fifth amendment was made on June 10, 2015. The sixth amendment was made on June 15, 2016. The seventh amendment was made on June 12, 2018. The eighth amendment was made on June 24, 2019.	The fifth amendment was made on June 10, 2015. The sixth amendment was made on June 15, 2016. The seventh amendment was made on June 12, 2018.

< Attachment 6>

NUVOTON TECHNOLOGY CORPORATION Comparison Table of Amendments to Procedures of Acquisition or Disposal of Assets

Articles After Amendment	Articles After Amendment	Article Before Amendment	Article Before Amendment	Note
Article 1 The scope of applicability of the term "Assets" as used in these Procedures is as follows: (1) Stocks, government bonds, corporate bonds, financial debentures, securities representing units of funds, depositary receipts, call (put) warrants, beneficiary securities, asset-backed securities. (2) Real property (including land, houses and buildings, investment property, rights to use land, and construction enterprise inventory) and equipment. (3) Memberships (4) Patents, copyrights, trademarks, franchise rights, and other intangible assets. (5) Right-of-use assets. (6) Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue receivables). (7) Derivatives. (8) Assets acquired or disposed of through mergers, spin-offs, acquisitions or transfer of shares in accordance with the law. (9) Other major assets.		Article 1 The scope of applicability of the term "Assets" as used in these Procedures is as follows: (1) Stocks, government bonds, corporate bonds, financial debentures, securities representing units of funds, depositary receipts, call (put) warrants, beneficiary securities, asset-backed securities. (2) Real property (including land, houses and buildings, investment property, ~~rights to use land,~~and construction enterprise inventory) and equipment. (3) Memberships (4) Patents, copyrights, trademarks, franchise rights, and other intangible assets. ~~(5)~~ Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue receivables). ~~(6)~~ Derivatives. ~~(7)~~ Assets acquired or disposed through mergers, spin-offs, acquisitions or transfer of shares in accordance with the law. ~~(8)~~ Other major assets.		1. Subparagraph (5) is newly added to expand the scope of the assets that the Company has the right to use to conform to IFRS16 Leases, and the current Subparagraph (2) regarding the right to use land is moved to Subparagraph (5). 2. The current Subparagraphs (5) to (7) are moved to and become Subparagraphs (6) to (8).
Article 4 The term Procedures	"Subsidiary" under these shall be determined in	Article 4 The term Procedures	"Subsidiary" under these has the meaning as defined in	This article is revised to conform to laws and regulations.

Articles After Amendment	Article Before Amendment	Note
accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.	the International Financial Reporting Standards published by the Financial Supervisory Commission and in adherence to relevant laws and regulations.

Article 5 The term "Related Party" under these Procedures shall be determined in accordance with the Regulations governing the Preparation of Financial Reports by Securities Issuers.	Article 5 The term "Related Party" under these Procedureshas the meaning as defined in the International Financial Report by the Financial Supervisory Commission and in adherence to relevant laws and regulations.	This article is revised to conform to laws and regulations.
Article 6 The term "Derivatives" under these Procedures means forward contracts, options contracts, futures contracts, leverage contracts and swap contracts, whose value is derived from,specific interest rates,financial instrument prices, commodity prices, exchange rates, indexes of prices or rates, credit rating or credit index, or other variables; or hybrid contracts combining the above contracts; or hybrid contracts or structured products containing embedded derivatives.The term "Forward Contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts or long-term purchase (sales) contracts.	Article 6 The term "Derivatives" under these Procedures means forward contracts, options contracts, futures contracts, leverage contracts, swap contracts~~and~~ ~~compound contracts combining the above~~ ~~products,~~whose value is derived from ~~assets,~~interest rates, exchange rates, ~~indexes or other interests.~~The term "Forward Contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts or long-term purchase (sales) contracts.	The scope of derivatives is amended to conform to the definitions in IFRS 9 Financial Instruments.
Article 7 Assets acquired or disposed of through mergers, spin-offs, acquisitions or assignment of shares in accordance with law under these Procedures means assets acquired or disposed of through mergers, spin-offs or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and/or other acts/laws,or acquisitions of shares through	Article 7 Assets acquired or disposed of through mergers, spin-offs, acquisitions or assignment of shares in accordance with law under these Procedures means assets acquired or disposed through mergers, spin-offs or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and/or other acts/laws,or acquisitions of shares	The number of the article of the Company Act cited in this article is revised due to the amendment to the Company Act.

Articles After Amendment	Article Before Amendment	Note
issuance of new shares of its own as the consideration therefore (hereinafter "Assignment of Shares") under Article 156- 3 of the Company Act.	through issuance of new shares of its own as the consideration therefore (hereinafter "Assignment of Shares") under~~Paragraph~~ ~~8,~~Article 156 of the Company Act~~.~~
Article 9 Professional Appraisers and their officers, certified public accountants, attorneys and securities underwriters that provide the Company with appraisal reports, certified public accountant's opinions, attorney's opinions or underwriter's opinions shall meet the following requirements: 1. It/he shall not have previously received a final and unappealable sentence to imprisonment for one (1) year or longer for a violation of the Securities and Exchange Act, the Company Act, the Banking Act, the Insurance Act, the Financial Holding Company Act, or the Business Entity Accounting Act, or for fraud, breach of trust, embezzlement, forgery of documents, or occupational crime; provided, however, that this provision does not apply if three (3) years have already passed since the completion of the term of the imprisonment sentence, since expiration of the period of a probation, or since it/he was pardoned. 2. It/he may not be a Related Party or de facto Related Party of any party to the transaction. 3. If the Company is required to obtain appraisal reports from two or more professional appraisers, the different professional appraisers or appraisal officers may not be Related Parties or de facto Related Parties of each other. When issuing an appraisal report or opinion,	Article 9 Professional Appraisers and their officers, certified public accountants, attorneys and securities underwriters that provide the Company with appraisal reports, certified public accountant's opinions, attorney's opinions or underwriter's opinions shall not be aRelated Party of any party to the transaction.	The passive qualification of outside experts is specified in accordance with the laws and regulations. The items to be evaluated and examined by outside experts and the items to be covered by their statement are specified in accordance with Article 9 of the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Articles After Amendment	Article Before Amendment	Note
the personnel referred to in the preceding paragraph shall comply with the following: 1. Prior to accepting a case, it/he shall prudently assess its/his own professional capabilities, practical experience, and independence. 2. When examining a case, it/he shall appropriately plan and execute adequate work process, in order to produce a conclusion and use the conclusion as the basis for issuing the report or opinion. The relevant work procedures, data collected, and conclusion shall be fully and accurately specified in the working papers for the case. 3. It/he shall undertake an item-by-item evaluation of the comprehensiveness, accuracy, and reasonableness of the sources of data, the parameters, and the information used, as the basis for issuance of the appraisal report or the opinion. 4. It/he shall issue a statement attesting to the professional competence and independence of the personnel who prepared the report or opinion, and that it/he has evaluated and found that the information used is reasonable and accurate, and that it/he has complied with applicable laws and regulations. However, if the Company acquires or disposes of assets through a court auction, the court certificates may substitute for appraisal reports or the certified public accountant's opinions.	However, if the Company acquires or disposes of assets through a court auction, the court certificates may substitute for appraisal reports or the certified public accountant's opinions.
Article 11 The total amount for purchase of non- operating real propertyand its right-of-use assetsmaynot exceed100%of the	Article 11 The total amount for purchase of non- operating real property may not exceed 10%of the ownershipequityof the	To conform to IFRS 16 Lease, right-of-use assets of real property for non-operational

Articles After Amendment	Article Before Amendment	Note
ownership equity of the Company; the total amount for investment in securities may not exceed300%of the ownership equity of the Company; the amount for investment in individual securities may not exceed300% of the ownership equity of the Company.	Company; the total amount for investment in securities may not exceed100%of the ownership equity of the Company; the amount for investment in individual securities may not exceed50%of the ownership equity of the Company. ~~Total securities investments do not include~~ ~~amounts invested in the above-mentioned~~ ~~subsidiary companies.~~	use are included in this article and this article is revised based on actual needs.
Article 12 The restriction on the amount any Subsidiary of the Company may use to purchase non-operating real property and its right-of-use assetsand to invest in securities or each individual securities are as follows: (1) If such Subsidiary's main business is investment: The restriction on the amount for such Subsidiary to purchase non-operating real propertyand its right-of-use assetsmay not exceed10%of the ownership equity of such Subsidiary; the restriction on the amount for such Subsidiary to invest in securities may not exceed the paid-in capital of such Subsidiary or300%of ownership equity of such Subsidiary whichever is higher; however, the amount for investment in individual securities may not exceed the paid-in capital of such Subsidiary or 300% of the ownership equity of such Subsidiary, whichever is higher; provided, however, that the investment holding companies in which the Company holds 100% issued shares are not subject to the above restrictions (an investment holding company referred to above means a company having investment professionals for the	Article 12 The restriction on the amount any Subsidiary of the Company may use to purchase non-operating real property and to invest in securities or each individual securities are as follows: (1) If such Subsidiary's main business is investment: The restriction on the amount for such Subsidiary to purchase non- operating real property may not exceed100%of the ownership equity of such Subsidiary; the restriction on the amount for such Subsidiary to invest in securities may not exceed the paid-in capital of such Subsidiary or500%of ownership equity of the Company, whichever is higher; however, the amount for investment in individual securities may not exceed the paid-in capital of such Subsidiary or 300% of the ownership equity of such Subsidiary, whichever is higher.	To conform to the laws and regulations, right- of-use assets of real property for non- operational use are included in these Procedures and this article is revised based on actual needs.

	Articles After Amendment		Article Before Amendment	Note
(2)	purpose of controlling other companies'operations). If such Subsidiary's main business is not investment: The restriction on the amount for such Subsidiary to purchase non-operating real propertyand its right-of-use assetsmay not exceed100%of the ownership equity of such Subsidiary; the restriction on the amount to invest in securities may not exceed the paid- in capital of such Subsidiary or300% of the ownership equity of such Subsidiary, whichever is higher; however, the amount for investment in individual securities may not exceed the paid-in capital of such Subsidiary or300%of the ownership equity of such Subsidiary, whichever is higher.	(2)	If such Subsidiary's main business is not investment: The restriction on the amount for such Subsidiary to purchase non- operating real property may not exceed10%of the ownership equity of such Subsidiary; the restriction on the amount to invest in securities may not exceed the paid-in capital of such Subsidiary or100%of the ownership equity of such Subsidiary, whichever is higher; however, the amount for investment in individual securities may not exceed the paid-in capital of such Subsidiary or50%of the ownership equity of such Subsidiary, whichever is higher. ~~Total securities investments do not~~ ~~include amounts invested in above-~~ ~~mentioned Subsidiary companies by~~ ~~each Subsidiary.~~
Article 14 The procedures of acquisition or disposition of securities. (1) For the acquisition or disposal of negotiable securities, the Responsible Unit should attach the relevant evaluation report and submit the application tothe head-in-charge of the Responsible Unit.Transaction amounts less than but not including NT$100 million can be approved by the Chairman and authorized for processing by the Responsible Unit. Transaction amounts greater than (inclusive) NT$100 million, should be submitted tothe Audit Committee and Board of Directors for authorization.		Article 14 The procedures of acquisition or disposition of securities. (1) For the acquisition or disposal of negotiable securities, the responsible unit should attach the relevant evaluation report and submit the application to the President. Transaction amounts less than but not including NT$100 million, can be authorized for processing by the responsible unit by the Chairman. Transaction amounts greater than (inclusive) NT$100 million, should be submitted to the Board of Directors for authorization. If the acquisition or disposition of		This article is revised based on actual needs.

	Articles After Amendment		Article Before Amendment	Note
(2)	If the acquisition or disposition of securities is for the same purpose, it is not allowed to file different applications. When engaging in different transactions for the acquisition or disposition of securities, they should proceed in accordance with Paragraph (3) of this Article. In connection with the acquisition or disposition of securities for transaction purpose, the Responsible Unit is authorized to engage in the transaction within the investment quota approved by the board of directors meeting. After completion of the transaction, the Responsible Unit should report tothe head-in- charge of the Responsible Unit. (Hereafter Omitted)	(2)	securities is for the same purpose, it is not allowed to file different applications. When engaging in different transactions for the acquisition or disposition of securities, they should proceed in accordance with Paragraph (3) of this Article. In connection with the acquisition or disposition of securities, the Responsible Unit is authorized to engage in the transaction within the investment quota approved by the board of directors meeting. After completion of the transaction, the Responsible Unit should report to the President and Chairman~~. ~~ (Hereafter Omitted)
Article 15 Procedures for acquisition or disposal of real propertyand its right-of-use assets (1) The Responsible Unit should submit the purpose or use, the basis of determination of transaction price and transaction method for the acquisition or dispositionof real property, to the head-in-charge of the Responsible Unit for his/her approval and then submit it to theAudit Committee and board of directors for approval.For transactions of the right-of-use assets of real property in the amount reaching NT$100 million or above, the Responsible Unit shall follow the above procedure and then submit to the Audit Committee and the board of directors for approval. (2) In acquiringor disposingof real		Article 15 Procedures for acquisition or disposal of real property (1) The Responsible Unit should submit the purpose or use, the basis of determination of transaction price and transaction method for the acquisition or disposition, tothe President and Chairmanfor their approval and then submit it to the board of directors for approval. (2) In acquiringor disposingof real		1. To conform to IFRS 16_Lease_, right-of- use asset are newly added in this article. 2. The equipment provided in current Paragraph (3) of Article 15 is moved to Subparagraph (4) of Paragraph 1 of Article 17.

	Articles After Amendment	Article Before Amendment	Note
(3)	propertyor its right-of-use assets where the transaction amount reaches 20% of the Company's paid-in capital or NT$300,000,000 or above, unless transacting with adomestic government agency, commissioning others to build on its own land, or commissioning others to build on rented land, an appraisal report should be obtained in advance from a Professional Appraiser and the transaction should be complied with the provisions of Article 18 of these Procedures. In acquiring or disposing of real propertyor its right-of-use assetsfrom or to a Related Party or in acquiring or disposing of any other assets which are not real propertyor its right-of-use assetswhere the transaction amount reaches 20% of the Company's paid- in capital ,or 10% of the Company's total assets, or NT$300,000,000 or above, except in the trading of domesticgovernment bonds or bonds under repurchase and resale agreements, or subscription or redemption of domestic money market funds, the Company may not proceed with execution of a transaction contract or making any payment unless and until the following information has been submitted for approval from the Audit Committee and board of directors meeting: 1. The purpose, necessity and anticipated benefit of the real property acquisition or disposal. 2. The reason for choosing the related party as a trading counterparty.	property where the transaction amount reaches 20% of the Company's paid-in capital or NT$300,000,000 or above, unless transacting with a government agency, commissioning others to build on its own land, or commissioning others to build on rented land, an appraisal report should be obtained in advance from a Professional Appraiser and the transaction should be complied with the provisions of Article 18 of these Procedures. (3) In acquiring or disposing of real property from or to a Related Party or in acquiring or disposing of other assets which are not real property or its right-of-use assets where the transaction amount reaches 20% of the Company's paid-in capital ,or 10% of the company's total assets, or NT$300,000,000 or above, except in the trading of government bonds or bonds under repurchase and resale agreements, or subscription or redemption of domestic money market funds, the Company may not proceed with execution of a transaction contract or making any payment unless and until the following information has been submitted for approval from the Audit Committee and board of directors meeting: 1. The purpose, necessity and anticipated benefit of the real property acquisition or disposal. 2. The reason for choosing the related party as a trading

	Articles After Amendment	Article Before Amendment	Note
3. 4. 5. 6. 7. 8.	The relevant information regarding appraisal of the reasonableness of the preliminary transaction terms for acquisition of real propertyor its right-of-use assetsfrom a Related Party in accordance with the provisions of Paragraphs (5) and (6)of this Article. The date and price at which the Related Party originally acquired the real property, the original trading counterparty and that trading counterparty's relationship with the Company and the Related Party. Monthly cash flow forecasts for the year commencing from the month of anticipated signing of the contract and evaluation of the necessity of the transaction and reasonableness of the use of proceeds. An appraisal report from a professional appraiser or a CPA's opinion obtained in compliance withParagraph (2) of this Article. Restrictive terms and other important stipulations associated with the transaction. The calculation of the transaction amount shall be conducted in accordance with Paragraph 2 of Article 25, and "within the preceding year" as used herein refers to the year preceding the Date of Occurrence of the transaction. Items that have been approved by the Audit Committee and the board of directors need not	counterparty. 3. The relevant information regarding appraisal of the reasonableness of the preliminary transaction terms for acquisition of real property from a Related Party in accordance with the provisions of Paragraphs (4) and (5) of this Article. 4. The date and price at which the Related Party originally acquired the real property, the original trading counterparty and that trading counterparty's relationship with the Company and the Related Party. 5. Monthly cash flow forecasts for the year commencing from the month of anticipated signing of the contract and evaluation of the necessity of the transaction and reasonableness of the use of proceeds. 6. An appraisal report from a professional appraiser or a CPA's opinion obtained in compliance with~~the preceding~~article. 7. Restrictive terms and other important stipulations associated with the transaction. The calculation of the transaction amountas set forth in the preceding paragraphshall be conducted in accordance with Paragraph 2 of Article 25, and "within the preceding year" as used herein refers to the year preceding the Date of Occurrence of the transaction. Items that have been approved bythe Audit

Articles After Amendment	Article Before Amendment	Article Before Amendment	Note
be counted toward the transaction amount. 9.When a matter is submitted for discussion by the board of directors, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the meeting minutes of the board of directors meeting. 10. The items which requires approval of the Audit Committee need first be approved by more than half of all Audit Committee members and then submitted to the board of directors for a resolution, and shall be subject to mutatis mutandis application of Paragraphs3and 4of Article 29. (4) Wherethe right-of-use assets ofreal propertyfor operational use are		Committee and the board of directors not be counted toward the transaction amount. ~~With respect to the acquisition or~~ ~~disposal~~ ~~of~~ ~~business-use~~ ~~equipment between the Company~~ ~~and its parent or subsidiaries, the~~ ~~Company's Board of Directors~~ ~~may delegate the Chairman to~~ ~~decide such matters when the~~ ~~transaction is within a certain~~ ~~amount and have the decisions~~ ~~subsequently submitted to and~~ ~~ratified by the next Board of~~ ~~Directors meeting.~~ When a matter is submitted for discussion by the Board of Directors~~pursuant to paragraph~~ ~~1,~~the Board of Directors shall take into full consideration each Independent Director's opinions. If an Independent Director objects to or expresses reservations about any matter, it shall be recorded in the meeting minutes of the Board of Directors meeting. The items~~in Paragraph 1 w~~hich requires approval of the Audit Committee need first be approved by more than half of all Audit Committee members and then submitted to the board of directors for a resolution, and shall be subject to mutatis mutandis application of Paragraph 3 of Article 29.

	Articles After Amendment	Article Before Amendment	Note
(5) 1. 2.	acquired or disposed of by and between the Companyand its parent company,Subsidiaries,or by and among the Company's Subsidiaries in which the Company directly or indirectly holds 100 percent of the issued shares or capital,the Chairman of the board of directors is authorized to approve the transaction with the transaction amountof less than NT$300 millionfirst and then the transaction after consummation shall be submitted tothe Audit Committee and the board of director ratification. In acquiring real propertyor its right- of-use assetsfrom a Related Party, the reasonableness of the transaction costs shall be evaluated by the following means: Based upon the Related Party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer in accordance with the law. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year the Company purchases the property; provided, it may not be higher than the maximum non- financial industry lending rate announced by the Ministry of Finance ROC. Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan. The actual cumulative amount loaned by the financial institution shall have reached 70% or more of the financial institution's appraised loan value of theproperty	~~(4)~~ In acquiring real property from a Related Party, the reasonableness of the transaction costs shall be evaluated by the following means: 1. Based upon the Related Party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer in accordance with the law. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year the Company purchases the property; provided, it may not be higher than the maximum non- financial industry lending rate announced by the Ministry of Finance ROC. 2. Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan. The actual cumulative amount loaned by the financial institution shall have reached 70% or more of the financial institution's

	Articles After Amendment	Article Before Amendment	Note
and the period of the loan shall have been one year or more. However, this shall not apply where the financial institution is a Related Party of one of the trading counterparties. 3. Where land and building(s) thereupon are combined as a single property purchased or leased in one transaction, the transaction costs for the land and building(s) may be separately appraised in accordance with the provisions of the above items. 4. If the Company acquires real property or its right-of-use assetsfrom a Related Party and appraises the cost of the real propertyor its right-of-use assetsin accordance with items 1, 2 and 3 of Paragraph(5)of this Article, a certified public accountant shall also be engaged to check the appraisal and render a specific opinion. 5. Where the Company acquires real propertyor its right-of-use assetsfrom a Related Party and one of the following circumstances exists, the acquisition shall be conducted in accordance with Paragraph (3) of this Article and the provisions of the preceding four items do not apply: (A) The Related Party acquired the real propertyor its right- of-use assets through inheritance or as a gift. (B) More than five years have elapsed from the time the Related Party signed the contract to obtain the real		appraised loan value of the property and the period of the loan shall have been one year or more. However, this shall not apply where the financial institution is a Related Party of one of the trading counterparties. 3. Where land and building(s) thereupon are combined as a single property purchased in one transaction, the transaction costs for the land and building(s) may be separately appraised in accordance with the provisions of the above items.44. If the Company acquires real property from a Related Party and appraises the cost of the real property in accordance with items 1, 2 and 3 of Paragraph (4) of this Article, a certified public accountant shall also be engaged to check the appraisal and render a specific opinion. 5. Where the Company acquires real property from a Related Party and one of the following circumstances exists, the acquisition shall be conducted in accordance with Paragraph (3) of this Article and the provisions of the preceding four items do not apply: (A) The Related Party acquired the real property through inheritance or as a gift. (B) More than five years have elapsed from the time the Related Party signed the contract to obtain the realpropertyto the signing

Articles After Amendment	Article Before Amendment	Note
propertyor its right-of-use assetsto the signing date for the current transaction. (C) The real property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build real property, either on the company's own land or on rented land. (D)The right-of-use assets of real property for operational use are acquired or disposed of by and between the Company and its parent company or Subsidiaries, or by and among the Company's Subsidiaries in which the Company directly or indirectly holds 100 percent of the issued shares or capital. (6) When the results of the Company's appraisal conducted in accordance with the provisions of items 1, 2 and 3 of the preceding Paragraph are all lower than the transaction price, the transaction shall be conducted in accordance with Article 16 hereof. However, if any of the following circumstances exists, and objective evidence has been submitted and specific opinions on reasonableness of the transaction price have been obtained from a professional real property appraiser and a certified public accountant have been obtained, the preceding sentence shall not apply: 1. Where the Related Party acquired undeveloped land or leased land	date for the current transaction. (C) The real property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build real property, either on the company's own land or on rented land.2. (5)When the results of the Company's appraisal conducted in accordance with the provisions of items 1, 2 and 3 of the preceding Paragraph are all lower than the transaction price, the transaction shall be conducted in accordance with Article 16 hereof. However, if any of the following circumstances exists, and objective evidence has been submitted and specific opinions on reasonableness of the transaction price from a professional real property appraiser and a certified public accountant have been obtained, the preceding sentence shall not apply: 1. Where the Related Party acquired undeveloped land or leased land

Articles After Amendment	Article Before Amendment	Note
for development, it may submit of compliance with one of the following conditions: (A) Where aggregate values of the undeveloped land appraised in accordance with the means in the preceding Paragraph and the building(s) according to the Related Party's construction cost plus reasonable construction profit are in excess of the actual transaction price. "Reasonable Construction Profit" shall be deemed to be of no more than 500 meters or parcels close in publicly announced current value; transactions for similarly sized real property in principle refer to transactions completed by unrelated parties for real property with an area of no less than 50% of the property in the planned transaction; within one year refers to one year from the actual date of acquisition of the real property. the average gross operating profit margin of the Related Party's construction division over the most recent three years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lowest. (B)Transactions by unrelated parties within the preceding year involving other floors of	for development, it may submit of compliance with one of the following conditions: (A)Where aggregate values of the undeveloped land appraised in accordance with the means in the preceding Paragraph and the building(s) according to the Related Party's construction cost plus reasonable construction profit are in excess of the actual transaction price. "Reasonable Construction Profit" shall be the average gross operating profit margin of the Related Party's construction division over the most recent three years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower. (B) ~~Completed~~ transactions by unrelated parties within the preceding year involving other floors of the samepropertyor

	Articles After Amendment		Article Before Amendment	Note
2.	the same property or neighboring property, where the land/building area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard real property sale/purchase market practicesor leasing practice. Where the Company acquiring real propertyor obtaining the right-of- use assets of real property through leasingfrom a Related Party provides evidence that the terms of the transaction are similar to the terms of transactions for the acquisition of neighboring real property of a similar size by unrelated parties within the preceding year. Transactions for neighboring real property in the preceding two paragraphs in principle refer to real property on the same or an adjacent block and within a distance; a transaction with similar size in principle refers to a transaction by unrelated parties for parcels with a land area of no less than 50% of the property in the planned transaction;"within one		neighboring property, where the land/building area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard real property sale/purchase market practices. ~~(C)~~ ~~Completed~~ ~~leasing~~ ~~transactions by unrelated parties~~ ~~for other floors of the same~~ ~~property within the preceding~~ ~~year, where the transaction terms~~ ~~are similar after calculation of~~ ~~reasonable price discrepancies~~ ~~among floors in accordance with~~ ~~standard real property leasing~~ ~~market practices.~~ 2. Where the Company acquiring real property from a Related Party provides evidence that the terms of the transaction are similar to the terms of transactions~~completed~~ for the acquisition of neighboring real property of a similar size by unrelated parties within the preceding year. ~~Completed~~ transactions for neighboring real property in the preceding two items in principle refer to real property on the same or an adjacent block and within a distance of no more than 500 meters or close in publicly announced current value; a transaction with similar size in principle refers to a transaction ~~completed~~by unrelated parties for parcels with a land area of no less than 50% of thepropertyin

Articles After Amendment	Articles After Amendment	Article Before Amendment	Note
	year" refers to the year preceding the actual date of acquisition of the real property or its right-of-use assets.	the planned transaction; "within one year" refers to the year preceding the actual date of acquisition of the real property.
Article 16 Where the Company acquires real property or its right-of-use assetsfrom a Related Party and the results of appraisals conducted in accordance with the provisions of Paragraphs(5)and(6)of Article 15 are uniformly lower than the transaction price, the following shall be done: (1) The difference between the real property or its right-of-use assets transaction price and the appraised costs shall be set aside as a special reserve in accordance with the Paragraph 1 of Article 41 of the Securities and Exchange Act and may not be distributed or used for capital increase and issuance of bonus shares. If an investor that has investment in the Company and adopts the equity method for such investment and is a public company, in relation to its share of the above special reserve set aside by the Company, it shall also set aside a special reserve under Paragraph 1 of Article 41 of the Securities and Exchange Act in proportion to its shareholding. (2)Members ofthe Audit Committeewho are independent directorsshall comply with the provisions of Article 218 of the Company Act. (3) The circumstances of handling under the above subparagraphs 1 and 2 shall be reported to the shareholders meeting and the detailed contents of the transaction disclosed in the annual		Article 16 Where the Company acquires real property from a Related Party and the results of appraisals conducted in accordance with the provisions of Paragraphs(4)and(5)of Article 15 are uniformly lower than the transaction price, the following shall be done: (1) The difference between the real property transaction price and the appraised costs shall be set aside as a special reserve in accordance with the Paragraph 1 of Article 41 of the Securities and Exchange Act and may not be distributed or used for capital increase and issuance of bonus shares. If an investor that has investment in the Company and adopts the equity method for such investment and is a public company, in relation to its share of the above special reserve set aside by the Company, it shall also set aside a special reserve under Paragraph 1 of Article 41 of the Securities and Exchange Act in proportion to its shareholding. (2) The Audit Committee shall comply with the provisions of Article 218 of the Company Act. (3) The circumstances of handling under the above subparagraphs 1 and 2 shall be reported to the shareholders meeting and the detailed contents of the transaction disclosed in the annual	To conform to IFRS 16 Lease, this Article is amended to incorporate the matters to be done when the appraised cost is lower than the transaction price in the case of the acquisition of the right-of-use assets of real property from the lease with a Related Party.

	Articles After Amendment	Article Before Amendment	Note
(4) (5)	report and prospectus. If the Company has set aside a special reserve under this Article, the Company shall not utilize such special reserve until it has recognized a loss due to price decline for the assets it purchased or leasedat a premium, or they have been disposed of,or the lease contract has been terminated,or adequate compensation has been made, or the original condition has been restored, or there is other evidence confirming that it is not unreasonable to do so, and the FSC has agreed with the utilization. The Company shall also comply with the provisions of the preceding four subparagraphs when acquiring real propertyor its right-of-use assetfrom a Related Party if there is other evidence indicating that the transaction is in any way inconsistent with regular business practices.	report and prospectus. (4) If the Company has set aside a special reserve under the preceding paragraph, the Company shall not utilize such special reserve until it has recognized a loss due to price decline for the assets it purchased at a premium, or they have been disposed of, or adequate compensation has been made, or the original condition has been restored, or there is other evidence confirming that it is not unreasonable to do so, and the FSC has agreed with the utilization. (5) The Company shall also comply with the provisions of the preceding four subparagraphs when acquiring real property from a Related Party if there is other evidence indicating that the transaction is in any way inconsistent with regular business practices.
Article 17 The procedures of acquisition or disposition of equipmentor its right-of-use assets (1) Where the Responsible Unit is acquiring a fixed assetor its right-of- use assets,it should comply with the procedures of negotiation and evaluation of transaction price and should submit to the Chairman for approval; when disposing of a fixed asset, it should handle in accordance with the asset depreciation procedure; however, if the transaction amount reaches NT$100 million or above, it should be submitted tothe Audit Committee andthe board of directors meeting for approval.		Article 17 The procedures of acquisition or disposition of equipment (1) Where the Responsible Unit is acquiring a fixed asset, it should comply with the procedures of negotiation and evaluation of transaction price and should submit to the Chairman for approval; when disposing of a fixed asset, it should handle in accordance with the asset depreciation procedure; however, if the transaction amount reaches NT$100 million or above, it should be submitted to the board of directors meeting for approval.	To conform to IFRS 16 Lease, the right-of-use assets are newly added in this article.

	Articles After Amendment	Article Before Amendment	Note
(2) (3) (4)	If the transaction amount reaches 20% or more of the Company's paid-in capital or NT$300 million or above, unless transacting with a government agency or acquisition or disposal of the equipmentor its right-of-use assetfor operational use, prior to the Date of Occurrence of the transaction, an appraisal should be obtained by a Professional Appraiser who should issue an appraisal report and the transaction should be complied with Article 18 of these Procedures. Acquisition or disposal of assets other than real propertyor its right-of-use assetsfrom or to a Related Party must comply with Paragraph (3) of Article 15 of these Procedures. Where equipment or its right-of-use assets for operational use are acquired or disposed of by and between the Company and its parent company, Subsidiaries, or by and among the Company's Subsidiaries in which the Company directly or indirectly holds 100 percent of the issued shares or capital, the Chairman of the board of directors is authorized to approve the transaction with the transaction amount of less than NT$300 million first and then the transaction after consummation shall be submitted to the Audit Committee and the board of directors for ratification.	(2) If the transaction amount reaches 20% or more of the Company's paid-in capital or NT$300 million or above, unless transacting with a government agency or acquisition or disposal of the equipment for operational use, prior to the Date of Occurrence of the transaction, an appraisal should be obtained by a Professional Appraiser who should issue an appraisal report and the transaction should be complied with Article 18 of these Procedures. (3) Acquisition or disposal of assets other than real property from or to a Related Party must comply with Paragraph (3) of Article 15 of these Procedures.
Article 18 The evaluation of real property,equipment or their right-of-use assets In acquiring or disposing of real property, equipmentor their right-of-use assets, the Companyshould obtain an appraisal report		Article 18 The evaluation of real propertyor equipment In acquiring or disposing of real property orequipment, the Company should obtain an appraisal report in advance from a	To conform to IFRS 16 Lease, the right-of-use assets are newly added in this article.

Articles After Amendment	Article Before Amendment	Note
in advance from a Professional Appraiser and shall further comply with the following provisions: (1) Where due to special circumstances a limited price, specified price or special price must be given as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of directors, and thesameprocedure shall be followed for anysubsequentchanges to the terms and conditions of the transaction. (2) Where the transaction amount is NT$1 billion or more, appraisals from two or more Professional Appraisers shall be obtained. (Hereafter Omitted)	Professional Appraiser and shall further comply with the following provisions: (1) Where due to special circumstances a limited price, specified price or special price must be given as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of directors, and the procedureprovided aboveshall be followed for anyfuturechanges to the terms and conditions of the transaction. (2) Where the transaction amount is NT$1 billion or more, appraisals from two or more Professional Appraisers shall be obtained. (Hereafter Omitted)
Article 19 The procedures of acquisition or disposition of memberships (1) Where the Responsible Unit acquires or disposes of memberships, if the transaction amount is below NT$1 million, thehead-in-charge of the Responsible Unitis authorized to approve the transaction; if the transaction amount is NT$10 million or more, the transaction should be submitted tothe Audit Committee and the board of directors meeting for approval. (Hereafter Omitted)	Article 19 The procedures of acquisition or disposition of memberships (2) Where the Responsible Unit acquires or disposes of memberships, if the transaction amount isbelow NT$1 million, the President is authorized to approve the transaction; if the transaction amount is between NT$1 million and NT$10 million, the Chairman is authorized to approve the transaction. If the transaction amount is NT$10 million or more, it should be submitted to the board of directors meeting for approval. (Hereafter Omitted)	This article is revised based on actual needs.
Article 20: The procedures of acquisition or disposal of intangible assetsor their right-of-use assets (1)Where a legal basis exists for the	Article 20: The procedures of acquisition or disposal of intangible assets (1)Where a legal basis exists for the	To conform to IFRS 16 Lease, the right-of-use assets are newly added and this article is

Articles After Amendment Article Before Amendment development of products, whether development of products, whether jointly by the Company and other jointly by the Company and other entities, or by the Company on behalf of entities, or by the Company on behalf another entity, or by another entity on of another entity, or by another entity behalf of the Company, or for the on behalf of the Company, or for the Company to obtain certain techniques Company to obtain certain techniques or processes developed by other or processes developed by other entities, and the parties agree to have entities, and the parties agree to have or its right-of-use-of-useof-use-useuse any intangible asset resulting from such resulting from such development development to be owned by the to be owned by the Company, the Company, the authority to approve the authority to approve the acquisition or acquisition or disposal of such disposal of such intangible asset should intangible asset should rest with the rest with the head of the relevant center. head of the relevant center. Any Any agreement proposing to have any agreement proposing to have any or their right-of-use-of-useof-use-useuse intangible assets resulting from such resulting from such development, development, joint or otherwise, to be joint or otherwise, to be owned either owned either jointly by the Company jointly by the Company and another and another entity or by such other entity or by such other entity must in entity must in principle be approved by principle be approved by the head of the the head of the relevant business group; relevant business group; any agreement any agreement proposing to have proposing to have another entity to another entity to acquire any existing acquire any existing intangible assets or or intangible assets which the Company -of-use assets which the of-use assets which the -use assets which the use assets which the which the intends to dispose of must in principle Company intends to dispose of must in be approved by the head of the relevant principle be approved by the head of the business group, unless it is otherwise relevant business group, unless it is required to be approved by a higher otherwise required to be approved by a ranking officer in accordance with higher ranking officer in accordance relevant laws or regulations, board of with relevant laws or regulations, board directors or other rules of the Company of directors or other rules of the at the time of the acquisition or Company at the time of the acquisition disposal. (2) If the transaction amount for acquisition (2) If the transaction amount for or disposal of intangible assets or their acquisition or disposal of intangible -use assets reaches 20% or more use assets reaches 20% or more reaches 20% or more assets reaches 20% or more of the of the Company's paid-in capital or NT$3 Company's paid-in capital or NT$3 million or above, it should comply with million or above, it should comply with Paragraph 2 of Article 19 of these Paragraphs 2 of Article 19 of these Procedures.

development of products, whether jointly by the Company and other entities, or by the Company on behalf of another entity, or by another entity on behalf of the Company, or for the Company to obtain certain techniques or processes developed by other entities, and the parties agree to have any intangible asset or its right-of-use-of-useof-use-useuse assets resulting from such development to be owned by the Company, the authority to approve the acquisition or disposal of such intangible asset should rest with the head of the relevant center. Any agreement proposing to have any intangible assets or their right-of-use-of-useof-use-useuse assets resulting from such development, joint or otherwise, to be owned either jointly by the Company and another entity or by such other entity must in principle be approved by the head of the relevant business group; any agreement proposing to have another entity to acquire any existing intangible assets or or their right-of-use assets which the of-use assets which the -use assets which the use assets which the which the Company intends to dispose of must in principle be approved by the head of the relevant business group, unless it is otherwise required to be approved by a higher ranking officer in accordance with relevant laws or regulations, board of directors or other rules of the Company at the time of the acquisition or disposal.

(2) If the transaction amount for acquisition or disposal of intangible assets or their right-of-use assets reaches 20% or more use assets reaches 20% or more reaches 20% or more of the Company's paid-in capital or NT$3 million or above, it should comply with Paragraph 2 of Article 19 of these Procedures.

Note revised based on actual needs.

Articles After Amendment	Article Before Amendment	Note
(3) When the Company intends to acquire or dispose of intangible assets or their right- of-use assets from or to a Related Party and the transaction amount reaches 20% or more of the Company's paid-in capital, 10% or more of the Company's total assets, or NT$300 million or above, except for transactions with domestic government agencies, the transaction should be conducted in accordance with Paragraphs 1 and 2 of this Article and Paragraph 3 of Article 15 of these Procedures. (4)If the transaction amount for an acquisition or disposal of intangible assets or their right-of-use assets reaches NT$100 million or above, such acquisition or disposal shall be submitted to the Audit Committee meeting and the board of directors meeting for approval.

Article 21 Where the Company's acquisition or disposal of assets is subject to the approval of the board of directors under these Procedures or other acts or regulations,such transaction should be first approved by more than half of all Audit Committee members and then submitted to the board of directors for resolution and Paragraphs 3 and 4 of Article 29 shall apply_mutatis_ mutandis. Where an acquisition or disposal of assets transaction is submitted to the board of directors for deliberation under the preceding Paragraph, the opinions of each independent director shall be given full consideration and their dissenting or qualified opinion shall be entered into the meeting minutes. Anytransaction conducted bythe Company	Article 21 The procedures of acquisition or disposal when engaging in Derivatives trading When the division in charge engages in Derivatives trading, the Derivatives are limited to the financial Derivatives only and such trading shall be handled in accordance with the "Procedures of Governing Engagement in Derivatives Transactions" of the Company. The Company shall supervise its Subsidiaries to draw up the relevant rules to manage the engagement in Derivatives trading and shall supervise its Subsidiaries to comply with the Derivatives trading rules. The Internal Audit will examine the relevant matters relating to the self- inspection report of its Subsidiaries	The situation that a Subsidiary is exempted from establishing rules relating to derivatives trading is specified to conform to laws and regulations.

Articles After Amendment	Article Before Amendment	Note
involving major assets or Derivative trading shall be approved by more than half of all Audit Committee members and submitted to the board of directors for resolution, and Paragraphs 3and 4 of Article 29 shall apply mutatis mutandis
Article 22 The procedures of acquisition or disposal of assets through mergers, spin-offs, acquisitions or assignment of shares (1) Where the Company conducts a merger, spin-off, acquisition, or assignment of shares, the Responsible Unit shall attach evaluation explanation which shall be approved by the Chairman and, prior to conveningthe meeting of the Audit Committee and the board meeting for resolution, retain a certified public accountant, attorney- in-law or securities underwriter to issue an opinion on the reasonableness of the share exchange ratio, acquisition price or distribution of cash or other property to shareholders and submit it tothe Audit Committee andthe board of directors for approval. (Hereafter Omitted)	Article 22 The procedures of acquisition or disposal of assets through mergers, spin-offs, acquisitions or assignment of shares (1) Where the Company conducts a merger, spin-off, acquisition, or assignment of shares, the Responsible Unit shall attach evaluation explanation which shall be approved by the Chairman and, prior to convening the board meeting for resolution, retain a certified public accountant, attorney-in-law or securities underwriter to issue an opinion on the reasonableness of the share exchange ratio, acquisition price or distribution of cash or other property to shareholders and submit it to the board of directors for approval. (Hereafter Omitted)	This article is revised based on actual needs.
Article 24 Where the Company's acquisition or disposal of assets is subject to the approval of the board of directors under these Procedures or other acts or regulations,such transaction should be first approved by more than half of all Audit Committee members and then submitted to the board of directors for resolution and Paragraphs 3 and 4 of Article 29 shall apply mutatis mutandis.. Where the Company has installed independent directors,when an acquisition	Article 24 Where the Company's acquisition or disposal of assets is subject to the approval of the board of directors under these Procedures or other acts or regulations,and where a director expresses dissent and it is contained in the minutes or a written statement, the Company shall distribute the director's opinion to the Audit Committee. Where the Company has installed independent directors, when an acquisition or disposal of assets transaction is reported to the board of directors for deliberation	This article is revised based on actual needs.

Articles After Amendment	Article Before Amendment	Note
or disposal of assets transaction is reported to the board of directors for deliberation under the preceding paragraph, the opinions of each independent director shall be given full consideration and their dissenting or qualified opinion shall be entered into the meeting minutes. Any transaction conducted by the Company involving major assets or derivative products shall be approved by more than half of all Audit Committee members and submitted to the board of directors for resolution, and Paragraphs 3and 4 of Article 29 shall apply mutatis mutandis.	under the preceding paragraph, the opinions of each independent director shall be given full consideration and their dissenting or qualified opinion shall be entered into the meeting minutes. Any transaction conducted by the Company involving major assets or derivative products shall be approved by more than half of all Audit Committee members and submitted to the board of directors for resolution, and Paragraph 3 of Article 29 shall apply mutatis mutandis.
Article 25 Under any of the following circumstances, the Company acquiring or disposing of assets shall publicly announce and report the relevant information on the website designated by the FSC in the prescribed format within two days commencing immediately from the Date of Occurrence of such fact: (1) Acquisition or disposal of real property or its right-of-use assetsfrom or to a Related Party, or acquisition or disposal of assets other than real propertyor its right-of-use assetsfrom or to a Related Party where the transaction amount reaches 20% or more of paid-in capital, 10% or more of the Company's total assets, or NT$300 million or more. This shall not apply to the trading of domesticgovernment bonds or bonds under repurchase and resale agreements, or subscription or redemption of domestic money market funds. (2) Merger, spin-off, acquisition, or assignment of shares.	Article 25 Under any of the following circumstances, the Company acquiring or disposing of assets shall publicly announce and report the relevant information on the website designated by the FSC in the prescribed format within two days commencing immediately from the Date of Occurrence of such fact: (1) Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20% or more of paid-in capital, 10% or more of the company's total assets, or NT$300 million or more. This shall not apply to the trading of government bonds or bonds under repurchase and resale agreements, or subscription or redemption of domestic money market funds. (2) Merger, demerger, acquisition, or transfer of shares.	To conform to IFRS 16 Lease, the right-of-use assets are newly added in this article and the public announcement of transactions with Related Parties is stipulated.

	Articles After Amendment	Article Before Amendment	Note
(3) (4) (5) (6)	Where losses from Derivatives trading reach the limits on aggregate losses or losses on individual contracts set out in the procedures adopted by the Company. Where equipmentor its right-of-use assetsfor business use are acquired or disposed of, and the transaction counterparty is not a Related Party and the transaction amount reaches any of the following thresholds: (a) For a public company whose paid-in capital is less than NT$10 billion, the transaction amount reaches NT$500 million or more. (b) For a public company whose paid-in capital is NT$10 billion or more, the transaction amount reaches NT$1 billion or more. Where land is acquired under an arrangement for commissioned construction on self-owned land or on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale,and furthermore the transaction counterparty is not a Related Party and the amount the Company expects to invest in the transaction is less than NT$500 million. Where an asset transaction other than those referred to in the preceding five subparagraphs, a disposal of receivables by a financial institution, or Mainland China Investment,reaches	(3) Where losses from Derivatives trading reach the limits on aggregate losses or losses on individual contracts set out in the procedures adopted by the Company. (4) Where~~the type of assets being~~ equipment for business use is acquired or disposed of, and the transaction counterparty is not a Related Party and the transaction amount reaches any of the following threshold: (a) For a public company whose paid-in capital is less than NT$10 billion, the transaction amount reaches NT$500 million or more. (b) For a public company whose paid-in capital is NT$10 billion or more, the transaction amount reaches NT$1 billion or more. (5) Where land is acquired under an arrangement for commissioned construction on self-owned land or on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the Company expects to invest in the transaction is less than NT$500 million. (6) Where an asset transaction other than those referred to in the preceding five subparagraphs, a disposal of receivables by a financial institution, or Mainland China Investment,

Articles After Amendment	Article Before Amendment	Note
20% or more of the Company's paid-in capital or NT$300 million; provided, that the above shall not apply in the following circumstances: (1) Trading ofdomesticgovernment bonds. (2) Trading of bonds under repurchase/resale agreements or subscription /purchase or repurchase of money market funds issued by domestic securities investment trust enterprises. The amount of transactions above shall be calculated as follows: (1) The amount of any individual transaction. (2) The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within one year. (3) The cumulative transaction amount of real propertyor its right-of-use assetsacquisitions and disposals (cumulative acquisitions and disposals, respectively) within the same development project within one year. (4) The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within one year. (Hereafter Omitted) Where the Company acquires or disposes of assets, the division in charge shall keep all relevant contracts,	reaches 20% or more of the Company's paid-in capital or NT$300 million; provided, that the above shall not apply in the following circumstances: (1) Trading of government bonds. (2) Trading of bonds under repurchase/resale agreements or subscription /purchase or repurchase of money market funds issued by domestic securities investment trust enterprises. The amount of transactions above shall be calculated as follows: (1) The amount of any individual transaction. (2) The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within one year. (3) The cumulative transaction amount of real property acquisitions and disposals (cumulative acquisitions and disposals, respectively) within the same development project within one year. (4) The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within one year. (Hereafter Omitted) Where the Company acquires or disposes of assets, the division in charge shall keep all relevant contracts,meetingminutes,logbooks,

Articles After Amendment	Article Before Amendment	Article Before Amendment	Note
meeting minutes, log books, appraisal reports and opinions of certified public accountants, attorneys, and securities underwriters at the Company, where they shall be stored for five years, unless otherwise provided by laws.	appraisal reports and opinions of certified public accountants, attorneys, and securities underwriters at the Company, where they shall be stored for five years, unless otherwise provided by laws.
Article 27 Information required to be reported in accordance with the provisions of Chapter II hereof on acquisitions and disposals of assets by any Subsidiary of the Company that is not a domestic public company shall be reported by the relevant division in charge of the Company. The paid-in capital or total assets of the Company shall be the standard for determining whether a transaction conducted by a Subsidiary referred to in the preceding Paragraph reaches the threshold relative to paid-in capital or total assets, which requires public announcement and regulatory filing under Paragraph 1 of Article 25 hereof.	Article 27 Information required to be reported in accordance with the provisions of Chapter II on acquisitions and disposals of assets by any Subsidiary of the Company that is not a domestic public company shall be reported by the relevant division in charge of the Company. The paid-in capital or total assets of the Company shall be the standard for determining whether a transaction conducted by a Subsidiary referred to in the preceding Paragraph reaches20% of paid-in capital or10% oftotal assets, which requires public announcement and regulatory filing under Paragraph 1 of Article 25 hereof.		This article is revised to accommodate the adjustment to Paragraph 1 of Article 25 hereof.
Chapter IV Penalty When managers or persons in charge violate these Procedures or the Regulations Governing the Acquisition and Disposal of Assets by Public Companies promulgated by the FSC, the Human Resources Division will make a proposal of penalty according to the severity of violation by each person based on the facts and evidence provided by the Responsible Unit or auditing division and submit the same to the head-in-charge	Chapter IV Penalty When managers or persons in charge violate these Procedures or the Regulations Governing the Acquisition and Disposal of Assets by Public Companies promulgated by the FSC, the Human Resources Division will make a proposal for penalty according to the severity of violation by each person based on the facts and evidences provided by the Responsible Unit or auditing division.Penalty on persons in charge will be submitted and approved by the		This article is revised based on actual needs.
for approval.Penalty on managers will be submitted to and resolved bythe Audit Committee andthe board meeting.
	Chairman after approval by the President; penalty on managers will be submitted to and resolved by the board meeting after approved by the Chairman. In the event anyirrecoverable losses of the
		of the

Articles After Amendment	Article Before Amendment	Note
In the event any irrecoverable losses of the Company are caused due to the willful or negligent acts or omissions ofan individual, such individual may be suspended from duties, subject to approval ofthe head-in- charge. The manager as described in this Article shall mean the manager as established in accordance with the ruling issued by the Securities and Futures Commission dated 27 March 2003 per its letter (Ref. No.: Tai-Tsai- Tseng-(3)-092001301); the person in charge shall mean the relevant chief who reviews and approves the execution of any such transactions	Company are caused due to the willful or negligent acts or omissions of the manger or person in charge, the person in charge and the manger may be suspended from duties,respectively subject to approval of ~~th~~e President and the Chairman. The manager as described in this Article shall mean the manager as established in accordance with the ruling issued by the Securities and Futures Commission dated 27 March 2003 per its letter (Ref. No.: Tai- Tsai-Tseng-(3)-092001301); the person in charge shall mean the relevant chief who reviews and approves the execution of any such transactions
Article 30 These Procedures were formulated on July 14, 2008. The first amendment was made on June 10, 2009. The second amendment was made on June 5, 2012. The third amendment was made on June 14, 2013. The fourth amendment was made on June 12, 2014. The fifth amendment was made on June 15, 2016. The sixth amendment was made on June 14, 2017 The seventh amendment was made on June 24, 2019	Article 30 These Procedures were formulated on July 14, 2008. The first amendment was made on June 10, 2009. The second amendment was made on June 5, 2012. The third amendment was made on June 14, 2013. The fourth amendment was made on June 12, 2014. The fifth amendment was made on June 15, 2016. The sixth amendment was made on June 14, 2017	The date of this amendment is added.

Procedures of Acquisition or Disposal of Assets (After Amendment)

I. Purpose

To efficiently manage the procedures of acquisition and disposition of the Company's assets and to ensure the Company's rights and interests, the Company enacts these Procedures.

II. Objective

To meet the Company's policies, to fully utilize resources and to properly acquire or dispose of assets to maximize the economic benefit to the Company.

III. Contents

Chapter I General

Article 1: The scope of applicability of the term "Assets" as used in these Procedures is as follows:
(1) Stocks, government bonds, corporate bonds, financial debentures, securities representing units of funds, depositary receipts, call (put) warrants, beneficiary securities, asset-backed securities.
(2) Real property (including land, houses and buildings, investment property, rights to use land, and construction enterprise inventory) and equipment.
(3) Memberships
(4) Patents, copyrights, trademarks, franchise rights, and other intangible assets.
(5) Right-of-use assets.
(6) Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue receivables).
(7) Derivatives.
(8) Assets acquired or disposed of through mergers, spin-offs, acquisitions or transfer of shares in accordance with law.
(9) Other major assets.
Article 2: The term "Date of Occurrence" under these Procedures means the date of execution of contract, date of payment, date of consignment trade, date of transfer, date of board of directors meeting or any other date that can confirm the counterpart and the transaction amount, whichever date is earliest; provided that, where approval of the competent authority is required for such transaction, the earlier of the earliest date above or the date of receipt of approval by the competent authority shall apply.
Article 3: The term "Professional Appraiser" under these Procedures means a real property appraiser or other person duly authorized by laws to engage in the value appraisal of real property or equipment.

Article 4: The term "Subsidiary" under these Procedures shall be determined in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Article 5: The term "Related Party" under these Procedures shall be determined in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
Article 6: The term "Derivatives" under these Procedures means forward contracts, options contracts, futures contracts, leverage contracts and swap, whose value is derived from, specific interest rates, financial instrument prices, commodity prices, exchange rates, indexes of prices or rates, credit rating or credit index, or other variables; or hybrid contracts combining the above contracts; or hybrid contracts or structured products containing embedded derivatives. The term "Forward Contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts or long-term purchase (sales) contracts.
Article 7: "Assets acquired or disposed of through mergers, spin-offs, acquisitions or assignment of shares in accordance with law" under these Procedures means assets acquired or disposed of through mergers, spin-offs or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and/or other acts/laws, or acquisitions of shares through issuance of new shares of its own as the consideration therefore (hereinafter "Assignment of Shares") under Article 156-3 of the Company Act.
Article 8: The term "Mainland Area Investment" means investments in People's Republic of China conducted in accordance with the provisions of the "Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area" promulgated by the Investment Commission of the Ministry of Economic Affairs.
Article 9: Professional Appraisers and their officers, certified public accountants, attorneys and securities underwriters that provide the Company with appraisal reports, certified public accountant's opinions, attorney's opinions or underwriter's opinions shall meet the following requirements:
It/he shall not have previously received a final and unappealable sentence to imprisonment for one (1) year or longer for a violation of the Securities and Exchange Act, the Company Act, the Banking Act, the Insurance Act, the Financial Holding Company Act, or the Business Entity Accounting Act, or for fraud, breach of trust, embezzlement, forgery of documents, or occupational crime; provided, however, that this provision does not apply if three (3) years have already passed since the completion of the term of the imprisonment sentence, since expiration of the period of a probation, or since it/he was pardoned.
It/he may not be a Related Party or de facto Related Party of any party to the transaction.
If the Company is required to obtain appraisal reports from two or more professional appraisers, the different professional appraisers or appraisal

officers may not be related parties or de facto related parties of each other. When issuing an appraisal report or opinion, the personnel referred to in the preceding paragraph shall comply with the following:

Prior to accepting a case, it/he shall prudently assess its/his own professional capabilities, practical experience, and independence.
When examining a case, it/he shall appropriately plan and execute adequate work process, in order to produce a conclusion and use the conclusion as the basis for issuing the report or opinion. The relevant work procedures, data collected, and conclusion shall be fully and accurately specified in the working papers for the case.
It/he shall undertake an item-by-item evaluation of the comprehensiveness, accuracy, and reasonableness of the sources of data, the parameters, and the information used, as the basis for issuance of the appraisal report or the opinion.
It/he shall issue a statement attesting to the professional competence and independence of the personnel who prepared the report or opinion, and that it/he has evaluated and found that the information used is reasonable and accurate, and that it/he has complied with applicable laws and regulations.

However, if the Company acquires or disposes of assets through a court auction, the court certificates may substitute for appraisal reports or the certified public accountant's opinions.

Article 10: Responsible Unit

The Responsible Unit under these Procedures means the business operating unit designated by the Company based on the nature of each business of the Company.

Article 11: The total amount for purchase of non-operating real property and its right-of-use assets may not exceed 100% of the ownership equity of the Company; the total amount for investment in securities may not exceed 300% of the ownership equity of the Company; the amount for investment in individual securities may not exceed 300% of the ownership equity of the Company.
Article 12: The restriction on the amount any Subsidiary of the Company may use to purchase non-operating real property and its right-of-use assets and to invest in securities or each individual securities are as follows:
(1) If such Subsidiary's main business is investment:

The restriction on the amount for such Subsidiary to purchase non-operating real property and its right-of-use assets may not exceed 10% of the ownership equity of such Subsidiary; the restriction on the amount for such Subsidiary to invest in securities may not exceed the paid-in capital of such Subsidiary or 300% of ownership equity of such subsidiary, whichever is higher; however, the amount for investment in individual securities may not exceed the paid-in capital of such Subsidiary or 300% of the ownership equity of such Subsidiary, whichever is higher; provided, however, that the investment

holding companies in which the Company holds 100% issued shares are not subject to the above restrictions (an investment holding company referred to above means a company having investment professionals for the purpose of controlling other companies' operations).

(2) If such Subsidiary's main business is not investment:
- The restriction on the amount for such Subsidiary to purchase non-operating real property and its right-of-use assets may not exceed 100% of the ownership equity of such Subsidiary; the restriction on the amount to invest in securities may not exceed the paid-in capital of such Subsidiary or 300% of the ownership equity of such Subsidiary, whichever is higher; however, the amount for investment in individual securities may not exceed the paidin capital of such Subsidiary or 300% of the ownership equity of such Subsidiary, whichever is higher.
Article 13: Each Subsidiary of the Company shall enact its "Procedures of Acquisition or Disposal of Assets" in accordance with "Regulations Governing the Acquisition or Disposal of Assets by Public Companies" issued by the Financial Supervisory Commission ("FSC") and these Procedures.

The acquisition or disposal of assets by each Subsidiary shall comply with the "Procedures of Acquisition or Disposal of Assets" of each such Subsidiary. And, the Internal Audit of the Company will examine the relevant matters relating to the self-inspection report of its Subsidiary.

Chapter II Procedures

Article 14: The procedures of acquisition or disposal of securities

For the acquisition or disposal of negotiable securities, the Responsible Unit should attach the relevant evaluation report and submit the application to the head-in-charge of the Responsible Unit. Transaction amounts less than but not including NT$100 million can be approved by the Chairman and authorized for processing by the Responsible Unit. Transaction amounts greater than (inclusive) NT$100 million, should be submitted to the Audit Committee and Board of Directors for authorization. If the acquisition or disposition of securities is for the same purpose, it is not allowed to file different applications. When engaging in different transactions for the acquisition or disposition of securities, they should proceed in accordance with Paragraph 3 of this Article.
In connection with the acquisition or disposition of securities for transaction purpose, the Responsible Unit is authorized to engage in the transaction within the investment quota approved by the board of directors meeting. After completion of the transaction, the Responsible Unit should report to the head-in-charge of the Responsible Unit.
If the Company acquires or disposes of securities which are not listed or

traded on the stock exchange or over-the-counter market, the Company shall, prior to the Date of Occurrence of the event, obtain financial statements of the target company for the most recent period, certified or reviewed by a certified public accountant, for reference in appraising the transaction price. In addition, if the transaction amount reaches 20% or more of the Company's paid-in capital or NT$300 million or above, the Company shall additionally engage a certified public accountant prior to the Date of Occurrence of the event to provide an opinion on the reasonableness of the transaction price. If the CPA needs to use the report of an expert as evidence, the CPA shall do so in accordance with the provisions of Statement of Auditing Standards published by the Accounting Research and Development Foundation ("ARDF"). This requirement does not apply, however, to securities which have publicly quoted prices from an active market, or where otherwise provided by regulations of the FSC.

In connection with Mainland Area Investment, approval from competent authorities should be obtained before proceeding with the transaction. Upon engaging in the investment, the transaction should be handled in accordance with this Article.

Article 15: Procedures for acquisition or disposal of real property and its right-of-use assets

(1) The Responsible Unit should submit the purpose or use, the basis of determination of transaction price and transaction method for the acquisition or disposition of real property, to the head-in-charge of the Responsible Unit for his/her approval and then submit it to the Audit Committee and board of directors for approval. For transactions of the right-of-use assets of real property in the amount reaching NT$100 million or above, the Responsible Unit shall follow the above procedure and then submit to the Audit Committee and the board of directors for approval.
(2) In acquiring or disposing real property or its right-of-use assets where the transaction amount reaches 20% of the Company's paid-in capital or NT$300,000,000 or above, unless transacting with a domestic government agency, commissioning others to build on its own land, or commissioning others to build on rented land, an appraisal report should be obtained in advance from a Professional Appraiser and the transaction should be complied with the provisions of Article 18 of these Procedures.
(3) In acquiring or disposing of real property or its right-of-use assets from or to a Related Party or in acquiring or disposing of any other assets which are not real property or its right-of-use assets where the transaction amount reaches 20% of the Company's paid-in capital ,or 10% of the Company's total assets, or NT$300,000,000 or above, except in the trading of domestic government bonds or bonds under repurchase and resale agreements, or subscription or redemption of domestic money market funds, the Company may not proceed with execution of a transaction contract or making any payment unless and

until the following information has been submitted for approval from the Audit Committee and board of directors meeting:

The purpose, necessity and anticipated benefit of the real property acquisition or disposal.
The reason for choosing the related party as a trading counterparty.
The relevant information regarding appraisal of the reasonableness of the preliminary transaction terms for acquisition of real property or its right-of-use assets from a Related Party in accordance with the provisions of Paragraphs (5) and (6) of this Article.
The date and price at which the Related Party originally acquired the real property, the original trading counterparty and that trading counterparty's relationship with the Company and the Related Party.
Monthly cash flow forecasts for the year commencing from the month of anticipated signing of the contract and evaluation of the necessity of the transaction and reasonableness of the use of proceeds.
An appraisal report from a professional appraiser or a CPA's opinion obtained in compliance with Paragraph (2) of this Article.
Restrictive terms and other important stipulations associated with the transaction.
The calculation of the transaction amount shall be conducted in accordance with Paragraph 2 of Article 25, and "within the preceding year" as used herein refers to the year preceding the Date of Occurrence of the transaction. Items that have been approved by the Audit Committee and the board of directors need not be counted toward the transaction amount.
When a matter is submitted for discussion by the board of directors, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the meeting minutes of the board of directors meeting.
The items which requires approval of the Audit Committee need first be approved by more than half of all Audit Committee members and then submitted to the board of directors for a resolution, and shall be subject to mutatis mutandis application of Paragraphs 3 and 4 of Article 29.
(4) Where the right-of-use assets of real property for operational use are acquired or disposed of by and between the Company and its parent company, Subsidiaries, or by and among the Company's Subsidiaries in which the Company directly or indirectly holds 100 percent of the issued shares or capital, the Chairman of the board of directors is authorized to approve the transaction with the transaction amount of less than NT$300 million first and then the transaction after consummation shall be submitted to the Audit

Committee and the board of director ratification.

(5) In acquiring real property or its right-of-use assets from a Related Party, the reasonableness of the transaction costs shall be evaluated by the following means:
Based upon the Related Party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer in accordance with the law. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year the Company purchases the property; provided, it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance ROC.
Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan. The actual cumulative amount loaned by the financial institution shall have reached 70% or more of the financial institution's appraised loan value of the property and the period of the loan shall have been one year or more. However, this shall not apply where the financial institution is a Related Party of one of the trading counterparties.
Where land and building(s) thereupon are combined as a single property purchased or leased in one transaction, the transaction costs for the land and building(s) may be separately appraised in accordance with the provisions of the above items.
If the Company acquires real property or its right-of-use assets from a Related Party and appraises the cost of the real property or its right-ofuse assets in accordance with items 1, 2 and 3 of Paragraph (5) of this Article, a certified public accountant shall also be engaged to check the appraisal and render a specific opinion.
Where the Company acquires real property or its right-of-use assets from a Related Party and one of the following circumstances exists, the acquisition shall be conducted in accordance with Paragraph (3) of this Article and the provisions of the preceding four items do not apply:
- (A) The Related Party acquired the real property or its right-of-use assets through inheritance or as a gift.
- (B) More than five years have elapsed from the time the Related Party signed the contract to obtain the real property or its right-of-use assets to the signing date for the current transaction.
- (C) The real property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build real property, either on the company's own land or on rented land.
- (D) The right-of-use assets of real property for operational use are

acquired or disposed of by and between the Company and its parent company or Subsidiaries, or by and among the Company's Subsidiaries in which the Company directly or indirectly holds 100 percent of the issued shares or capital.

(6) When the results of the Company's appraisal conducted in accordance with the provisions of items 1, 2 and 3 of the preceding Paragraph are all lower than the transaction price, the transaction shall be conducted in accordance with Article 16 hereof. However, if any of the following circumstances exists, and objective evidence has been submitted and specific opinions on reasonableness of the transaction price from a professional real property appraiser and a certified public accountant have been obtained, the preceding sentence shall not apply:
Where the Related Party acquired undeveloped land or leased land for development, it may submit of compliance with one of the following conditions:
- (A) Where aggregate values of the undeveloped land appraised in accordance with the means in the preceding Paragraph and the building(s) according to the Related Party's construction cost plus reasonable construction profit are in excess of the actual transaction price. "Reasonable Construction Profit" shall be the average gross operating profit margin of the Related Party's construction division over the most recent three years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower.
- (B) Transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring property, where the land/building area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard real property sale/purchase market practices or leasing practice.
Where the Company acquiring real property or obtaining the right-ofuse assets of real property through leasing from a Related Party provides evidence that the terms of the transaction are similar to the terms of transactions for the acquisition of neighboring real property of a similar size by unrelated parties within the preceding year.
- Transactions for neighboring real property in the preceding two items in principle refer to real property on the same or an adjacent block and within a distance of no more than 500 meters or close in publicly announced current value; a transaction with similar size in principle refers to a transaction by unrelated parties for parcels with a land area of no less than 50% of the property in the planned transaction; "within one year" refers to the year preceding the actual date of acquisition of the real

property or its right-of-use assets.

Article 16: Where the Company acquires real property or its right-of-use assets from a Related Party and the results of appraisals conducted in accordance with the provisions of Paragraphs (5) and (6) of Article 15 are uniformly lower than the transaction price, the following shall be done:
(1) The difference between the real property or its right-of-use assets transaction price and the appraised costs shall be set aside as a special reserve in accordance with the Paragraph 1 of Article 41 of the Securities and Exchange Act and may not be distributed or used for capital increase and issuance of bonus shares. If an investor that has investment in the Company and adopts the equity method for such investment and is a public company, in relation to its share of the above special reserve set aside by the Company, it shall also set aside a special reserve under Paragraph 1 of Article 41 of the Securities and Exchange Act in proportion to its shareholding.
(2) Members of the Audit Committee who are independent directors shall comply with the provisions of Article 218 of the Company Act.
(3) The circumstances of handling under the above subparagraphs 1 and 2 shall be reported to the shareholders meeting and the detailed contents of the transaction disclosed in the annual report and prospectus.
(4) If the Company has set aside a special reserve under this Article, the Company shall not utilize such special reserve until it has recognized a loss due to price decline for the assets it purchased or leased at a premium, or they have been disposed of, or the lease contract has been terminated, or adequate compensation has been made, or the original condition has been restored, or there is other evidence confirming that it is not unreasonable to do so, and the FSC has agreed with the utilization.
(5) The Company shall also comply with the provisions of the preceding four subparagraphs when acquiring real property or its right-of-use asset from a Related Party if there is other evidence indicating that the transaction is in any way inconsistent with regular business practices.

Article 17: The procedures of acquisition or disposition of equipment or its right-of-use assets

(1) Where the Responsible Unit is acquiring a fixed asset or its right-of-use assets, it should comply with the procedures of negotiation and evaluation of transaction price and should submit to the Chairman for approval; when disposing of a fixed asset, it should handle in accordance with the asset depreciation procedure; however, if the transaction amount reaches NT$100 million or above, it should be submitted to the Audit Committee and the board of directors meeting for approval.
(2) If the transaction amount reaches 20% or more of the Company's paid-in capital or NT$300 million or above, unless transacting with a government agency or acquisition or disposal of the equipment or its right-of-use asset for

operational use, prior to the Date of Occurrence of the transaction, an appraisal should be obtained by a Professional Appraiser who should issue an appraisal report and the transaction should be complied with Article 18 of these Procedures.

(3) Acquisition or disposal of assets other than real property or its right-of-use assets from or to a Related Party must comply with Paragraph (3) of Article 15 of these Procedures.
(4) Where equipment or its right-of-use assets for operational use are acquired or disposed of by and between the Company and its parent company, Subsidiaries, or by and among the Company's Subsidiaries in which the Company directly or indirectly holds 100 percent of the issued shares or capital, the Chairman of the board of directors is authorized to approve the transaction with the transaction amount of less than NT$300 million first and then the transaction after consummation shall be submitted to the Audit Committee and the board of directors for ratification.

Article 18: The evaluation of real property, equipment or their right-of–use assets

In acquiring or disposing of real property, equipment or their right-of-use assets, the Company should obtain an appraisal report in advance from a Professional Appraiser and shall further comply with the following provisions:

(1) Where due to special circumstances a limited price, specified price or special price must be given as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of directors, and the same procedure shall be followed for any subsequent changes to the terms and conditions of the transaction.
(2) Where the transaction amount is NT$1 billion or more, appraisals from two or more Professional Appraisers shall be obtained.
(3) Where the Professional Appraiser's appraisal results in any of the following circumstances, unless all the appraised values of the assets to be acquired are higher than the transaction amount, or all the appraised values of the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of General Auditing Procedures No. 20 published by the ARDF and express a specific opinion regarding the reason for the discrepancy and the fairness of the transaction price:
(a) Where the discrepancy between the appraisal result and the transaction amount reaches 20% or more of the transaction amount.
(b) Where the discrepancy between the appraisal results of two or more Professional Appraisers reaches 10% or more of the transaction amount.
(4) No more than 3 months may elapse between the date of the appraisal report issued by a Professional Appraiser and the contract execution date; provided, where the publicly announced current value for the same period is used and no

more than six months have elapsed, an opinion may still be issued by the original Professional Appraiser.

Article 19: The procedures of acquisition or disposition of memberships

(1) Where the Responsible Unit acquires or disposes of memberships, if the transaction amount is below NT$1 million, the head-in-charge of the Responsible Unit is authorized to approve the transaction; if the transaction amount is NT$10 million or more, the transaction should be submitted to the Audit Committee and the board of directors meeting for approval.
(2) Except for transactions with government agencies, if the transaction amount reaches 20% or more of the Company's paid-in capital or NT$300 million or above, an opinion on the fairness of the transaction price issued by a certified public accountant in accordance with the Statement of General Auditing Procedures No. 20 published by the ARDF are required prior to the Date of Occurrence of the transaction.
Article 19-1: Calculation of the transaction price provided in Articles 14, 15, 17, 19 and 20 shall be conducted in accordance with Paragraph 2 of Article 25 hereof, and "within one year" as used herein refers to the year preceding the Date of Occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount.
Article 20: The procedures of acquisition or disposal of intangible assets or their right-of-use assets
(1) Where a legal basis exists for the development of products, whether jointly by the Company and other entities, or by the Company on behalf of another entity, or by another entity on behalf of the Company, or for the Company to obtain certain techniques or processes developed by other entities, and the parties agree to have any intangible asset or its right-of-use assets resulting from such development to be owned by the Company, the authority to approve the acquisition or disposal of such intangible asset should rest with the head of the relevant center. Any agreement proposing to have any intangible assets or their right-of-use assets resulting from such development, joint or otherwise, to be owned either jointly by the Company and another entity or by such other entity must in principle be approved by the head of the relevant business group; any agreement proposing to have another entity to acquire any existing intangible assets or their right-of-use assets which the Company intends to dispose must in principle be approved by the head of the relevant business group, unless it is otherwise required to be approved by a higher ranking officer in accordance with relevant laws or regulations, board of directors or other rules of the Company at the time of the acquisition or disposal.
(2) If the transaction amount for acquisition or disposal of intangible assets or their right-of-use assets reaches 20% or more of the Company's paid-in capital or NT$3 million or above, it should comply with Paragraphs 2 of Article 19 of

these Procedures.

(3) When the Company intends to acquire or dispose of intangible assets or their right-of-use assets from or to a Related Party and the transaction amount ' -
reaches 20% or more of the Company s paid in capital, 10% or more of the Company's total assets, or NT$300 million or above, except for transactions with domestic government agencies, the transaction should be conducted in accordance with Paragraphs 1 and 2 of this Article and Paragraph 3 of Article 15 of these Procedures.
(4) If the transaction amount for an acquisition or disposal of intangible assets or their right-of-use assets reaches NT$100 million or above, such acquisition or disposal shall be submitted to the Audit Committee meeting and the board of directors meeting for approval.
Article 21: The procedures of acquisition or disposal when engaging in Derivatives trading
When the Finance Department engages in Derivatives trading, the Derivatives are limited to the financial Derivatives only and such trading shall be handled in accordance with the "Procedures for Engaging In Financial Derivatives Transactions" of the Company.

The Company shall supervise its Subsidiaries to draw up the relevant rules to manage the engagement in Derivatives trading and shall supervise its Subsidiaries to comply with the Derivatives trading rules. The Internal Audit will examine the relevant matters relating to the self-inspection report of its Subsidiaries. If any of the Company's Subsidiaries does not intend to engage in derivatives trading, it may, after obtaining the approval of its board of directors, be exempted from establishing the procedures governing derivatives trading. If it subsequently wishes to engage in derivatives trading, it shall still comply with Article 29 and the preceding paragraph before doing so.

Article 22: The procedures of acquisition or disposal of assets through mergers, spin-offs, acquisitions or assignment of shares
(1) Where the Company conducts a merger, spin-off, acquisition, or assignment of shares, the Responsible Unit shall attach evaluation explanation which shall be approved by the Chairman and, prior to convening the meeting of the Audit Committee and the board meeting for resolution, retain a certified public accountant, attorney-in-law or securities underwriter to issue an opinion on the reasonableness of the share exchange ratio, acquisition price or distribution of cash or other property to shareholders and submit it to the Audit Committee and the board of directors for approval. However, the requirement of obtaining an aforesaid opinion on reasonableness issued by an expert may be exempted in the case of a merger of a Subsidiary in which the Company directly or indirectly holds 100% of the issued shares or authorized capital, and in the case of a merger between Subsidiaries in which the Company directly or indirectly holds 100% of the respective Subsidiaries' issued shares or authorized capital.

(2) Where the Company participates in a merger, spin-off or acquisition, a public report to shareholders shall be prepared detailing important contractual content and matters relevant to the merger, spin-off, or acquisition prior to the shareholders meeting and such report should be included along with the expert opinion referred to in Paragraph (1) of this Article when sending convention notice of the shareholders meeting for reference in deciding whether to approve such merger, spin-off, or acquisition; provided, where a provision of another act exempts the Company from convening a shareholders meeting to approve the merger, spin-off, or acquisition, this restriction shall not apply.
Where the shareholders meeting of any one of the companies participating in a merger, spin-off, or acquisition fails to convene or pass a resolution due to lack of a quorum, insufficient votes, or other legal restriction, or the proposal is rejected by a shareholders meeting, the Company shall immediately publicly explain the reason, the follow-up measures, and the proposed date of the next shareholders meeting.
(3) The Company participating in a merger, spin-off, or acquisition shall convene the board meeting and the shareholders meeting on the same day as other parties to the transaction to resolve relevant matters of the merger, spin-off, or acquisition, unless otherwise provided by other laws or regulations or reported to and approved by the FSC in advance due to extraordinary circumstances.

The Company participating in an assignment of shares shall convene the board meeting on the same day as other parties to the transaction, unless otherwise provided by other laws or regulations or reported to and approved by the FSC in advance due to extraordinary circumstances.

(4) Where the Company participates in a merger, spin-off, acquisition, or assignment of shares, the Company shall prepare a complete written record of the following information and preserve it for five years for check:
Personnel's basic information: including the occupational titles, names, and national ID numbers (or passport numbers in the case of foreign nationals) of all persons involved in the plan or execution of any merger, spin-off, acquisition, or assignment of shares prior to the disclosure of the information.
Dates of material events: including the dates of signing of any letter of intent or memorandum of understanding, engagement of financial or legal advisor(s), execution of contract(s) and convention of a board of directors meeting.
Important documents and minutes: including plan of any merger, spinoff, acquisition, and assignment of shares, any letter of intent or memorandum of understanding, material contracts, and minutes of board of Directors meetings.
(5) Where the Company participates in a merger, spin-off, acquisition, or

assignment of shares, the Company shall, within two days commencing immediately from the date of the resolution of the board of directors approving such transaction, report the information set out in Subparagraphs 1 and 2 of the preceding Paragraph in the prescribed format via the Internet-based information system to the FSC for filing.

(6) Every person participating in or privy to the plan for any merger, spin-off, acquisition, or assignment of shares shall issue a written undertaking of confidentiality and may not disclose the content of the plan prior to public disclosure of the information and may not trade, in their own name or under the name of another person, in any stock or other equity securities of any company related to the plan for any merger, spin-off, acquisition, or assignment of shares.
(7) The Company participating in a merger, spin-off, acquisition, or assignment of shares may not arbitrarily alter the share exchange ratio or acquisition price unless under the below-listed circumstances, and shall stipulate the circumstances permitting alteration in the contract for the merger, spin-off, acquisition, or assignment of shares:
Cash capital increase, issuance of convertible corporate bonds, or the issuance of bonus shares, issuance of corporate bonds with warrants, preferred shares with warrants, stock warrants, or other equity based securities.
An action, such as a disposal of major assets, which affects the Company's financial conditions and operations.
An event, such as a material disaster or material change in technology that affects shareholder equity or share price.
An adjustment where any of the companies participating in the merger, spin-off, acquisition, or assignment of shares from another company, buys back treasury stock.
An increase or decrease in the number of entities or companies participating in the merger, spin-off, acquisition, or assignment of shares.
Other terms/conditions provided in the contract for alteration and have been publicly disclosed.
(8) The contract for a merger, spin-off, acquisition, or assignment of shares participated by the Company shall record the rights and obligations of the companies participating in the merger, spin-off, acquisition, or assignment of shares, and shall also record the following:
Handling of breach of contract.
Principles for the handling of equity-type securities previously issued or treasury stock previously bought back by any company that is dissolved in a merger or that is spun off.
The amount of treasury stock that the participating companies are

permitted under law to buy back after the record date of calculation of the share exchange ratio, and the principles for handling thereof.

The manner of handling changes in the number of participating entities or companies.
Anticipated progress schedule for plan execution, and anticipated completion date.
Scheduled date for convening the shareholders meeting in accordance with laws and regulations if the plan exceeds the deadline without completion, and relevant procedures.
(9) After public disclosure of the information, if the Company participating in a merger, spin-off, acquisition, or assignment of shares intends further to carry out a merger, spin-off, acquisition, or assignment of shares with another company, all of the participating companies shall carry out anew the procedures or legal actions that had originally been completed toward the merger, spin-off, acquisition, or assignment of shares; except that where the number of participating companies is decreased and a participating company's shareholders meeting has adopted a resolution authorizing the board of directors to alter the limits of authority, such participating company may be exempted from calling another shareholders meeting to resolve on the matter anew.
(10) Where a company participating in a merger, spin-off, acquisition, or assignment of shares is not a company listed on the stock exchanges or traded on over-the-counter markets, the Company shall sign an agreement with the non-public company, and comply with the provisions of Paragraphs (3), (4), (5), (6) and (9) of this Article.

Article 23: Other major assets

The procedures for the acquisition or disposal of other major assets should be handled in accordance with Article 19 of these Procedures.

Article 24: Where the Company's acquisition or disposal of assets is subject to the approval of the board of directors under these Procedures or other acts or regulations, such transaction should be first approved by more than half of all Audit Committee members and then submitted to the board of directors for resolution and Paragraphs 3 and 4 of Article 29 shall apply mutatis mutandis .
Where an acquisition or disposal of assets transaction is submitted to the board of directors for deliberation under the preceding Paragraph, the opinions of each independent director shall be given full consideration and their dissenting or qualified opinion shall be entered into the meeting minutes.

Any transaction conducted by the Company involving major assets or Derivatives trading shall be approved by more than half of all Audit Committee members and submitted to the board of directors for resolution, and Paragraphs 3 and 4 of Article 29 shall apply mutatis mutandis .

Chapter III Public Disclosure of Information

Article 25: Under any of the following circumstances, the Company acquiring or disposing of assets shall publicly announce and report the relevant information on the website designated by the FSC in the prescribed format within two days commencing immediately from the Date of Occurrence of such fact:
(1) Acquisition or disposal of real property or its right-of-use assets from or to a Related Party, or acquisition or disposal of assets other than real property or its right-of-use assets from or to a Related Party where the transaction amount reaches 20% or more of paid-in capital, 10% or more of the Company's total assets, or NT$300 million or more. This shall not apply to the trading of domestic government bonds or bonds under repurchase and resale agreements, or subscription or redemption of domestic money market funds.
(2) Merger, spin-off, acquisition, or assignment of shares.
(3) Where losses from Derivatives trading reach the limits on aggregate losses or losses on individual contracts set out in the procedures adopted by the Company.
(4) Where equipment or its right-of-use assets for operating use are acquired or disposed of, and the transaction counterparty is not a Related Party and the transaction amount reaches any of the following thresholds:
1. For a public company whose paid-in capital is less than NT$10 billion, the transaction amount reaches NT$500 million or more.
2. For a public company whose paid-in capital is NT$10 billion or more, the transaction amount reaches NT$1 billion or more.
(5) Where land is acquired under an arrangement for commissioned construction on self-owned land or on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and furthermore the transaction counterparty is not a Related Party and the amount the Company expects to invest in the transaction is less than NT$500 million.
(6) Where an asset transaction other than those referred to in the preceding five subparagraphs, a disposal of receivables by a financial institution, or Mainland China Investment, reaches 20% or more of the Company's paid-in capital or NT$300 million; provided, that the above shall not apply in the following circumstances:
1. Trading of domestic government bonds.
2. Trading of bonds under repurchase/resale agreements or subscription /purchase or repurchase of money market funds issued by domestic securities investment trust enterprises.

The amount of transactions above shall be calculated as follows:

(1) The amount of any individual transaction.

(2) The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within one year.
(3) The cumulative transaction amount of real property or its right-of-use assets acquisitions and disposals (cumulative acquisitions and disposals, respectively) within the same development project within one year.
(4) The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within one year.

"Within one year" as used in the preceding Paragraph refers to the year preceding the Date of Occurrence of the current transaction. Items publicly announced in accordance with these Procedures need not be counted toward the transaction amount.

The Finance Department shall compile monthly reports on the status of Derivatives trading engaged in up to the end of the preceding month by the Company and any Subsidiaries that are not domestic public companies and enter the information in the prescribed format into the information reporting website designated by the FSC by the 10th day of each month.

When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced and reported in their entirety within two days counting inclusively from the date of knowing of such error or omission.

Where the Company acquires or disposes of assets, the division in charge shall keep all relevant contracts, meeting minutes, log books, appraisal reports and opinions of certified public accountants, attorneys or securities underwriters at the Company, where they shall be stored for five years, unless otherwise provided by laws.

Article 26: Under any of the following circumstances, the Company, after publicly announcing and reporting the transaction in accordance with the preceding Article, shall publicly announce and report the relevant information on the website designated by the FSC within two days commencing immediately from the Date of Occurrence of such fact:
Change, termination, or rescission of a contract signed in regard to the original transaction.
The merger, spin-off, acquisition, or assignment of shares is not completed by the scheduled date set forth in the contract.
Change to any publicly announced and reported information.
Article 27: Information required to be reported in accordance with the provisions of Chapter II hereof on acquisitions and disposals of assets by any Subsidiary of the Company that is not a domestic public company shall be reported by the relevant division in charge of the Company.

The paid-in capital or total assets of the Company shall be the standard for

determining whether a transaction conducted by a Subsidiary referred to in the preceding paragraph reaches the threshold relative to paid-in capital or total assets, which requires public announcement and regulatory filing under Paragraph 1 of Article 25.

Chapter IV Penalty

When managers or persons in charge violate these Procedures or the Regulations Governing the Acquisition and Disposal of Assets by Public Companies promulgated by the FSC, the Human Resources Division will make a proposal for penalty according to the severity of violation by each person based on the facts and evidence provided by the Responsible Unit or auditing division and submit the same to the head-in-charge for approval. Penalty on managers will be submitted to and resolved by the Audit Committee and the board meeting.

In the event any irrecoverable losses of the Company are caused due to the willful or negligent acts or omissions of an individual, such individual may be suspended from duties, subject to approval of the head-in-charge.

The manager as described in this Article shall mean the manager as established in accordance with the ruling issued by the Securities and Futures Commission dated 27 March 2003 per its letter (Ref. No.: Tai-Tsai-Tseng-(3)-092001301); the person in charge shall mean the relevant chief who reviews and approves the execution of any such transactions.

Chapter V Effectiveness and Amendment

Article 28: For matters not covered herein, provisions in relevant laws and regulations and relevant rules of the Company shall govern.

Article 29: These Procedures are effective subject to the approval of the Audit Committee and the board of directors and then submitted to the shareholders meeting for approval. The preceding procedures shall apply if there is any amendment to these Procedures. If any director has objections to the Procedures and the objection is recorded or made in the form of the written statement, the information about the objections shall be sent to the Audit Committee.

When these Procedures are reported to the board of directors for deliberation under the preceding Paragraph, the opinions of each independent director shall be given full consideration and their dissenting or qualified opinion shall be entered into the meeting minutes.

If approval of more than half of all Audit Committee members as required in Paragraph 1 of this Article is not obtained, the procedures may be implemented if approved by two-thirds or more of all directors of the Board of Directors, and the resolution of the Audit Committee shall be recorded in the meeting minutes of the board of directors.

The terms "all Audit Committee members" and "all directors" in the preceding Paragraph shall mean the actual number of persons currently holding those positions.

Article 30: These Procedures were formulated on July 14, 2008.

The first amendment was made on June 10, 2009. The second amendment was made on June 5, 2012. The third amendment was made on June 14, 2013. The fourth amendment was made on June 12, 2014. The fifth amendment was made on June 15, 2016. The sixth amendment was made on June 14, 2017

The seventh amendment was made on June 24, 2019

Chapter VI Reference Documents

Regulation: Regulations Governing the Acquisition and Disposal of Assets by Public Companies

NUVOTON TECHNOLOGY CORPORATION Comparison Table of Amendment to Procedures for Engaging In Financial Derivatives Transactions

Articles After Amendment Article Before Amendment Note Article 1: Scope of Derivatives Article 1: Scope of Derivatives The scope of derivative The financial derivatives that the Company The financial derivatives that the Company may products is may engage in refers to forward contracts, engage in refers to forward contracts, option amended in option contracts, future contracts, leverage contracts, future contracts, leverage contracts, accordance with contracts, or swap contracts, whose value is swap contracts ~~and compound~~ contracts the letter dated derived from a specific interest rate, financial ~~combining the above products,~~ whose value is instrument price, commodity price, exchange derived from the underlying ~~assets,~~ interest November 26, rates, index of prices or rates, credit rating or rates, exchange rates, indices or other ~~interests~~ . 2018 issued by the Financial credit index, or other variables; or hybrid The term "forward contracts" does not include contracts combining the above contracts, or insurance contracts, performance contracts, Supervisory Commission hybrid contracts or structured products after-sale service contracts, long-term leasing containing embedded derivative products. contracts or long-term purchase/sales contracts (Ref. No.: JinThe term "forward contracts" does not Guan-Jeng-FaTzeinclude insurance contracts, performance 1070341072) contracts, after-sale service contracts, longand the term leasing contracts or long-term definition purchase/sales contracts provided in International Financial Reporting Standard (IFRS) 9, Financial Instruments. Article 3: Separation of Powers and Article 3: Separation of Powers and To modify the Obligations Obligations numeral order of 1. Finance Division: 1. Finance Division: the paragraphs and explanations The Finance Division shall have ~~a.~~ The Finance Division shall in the article.

The Finance Division shall have ~~a.~~ The Finance Division shall officers of trading, telephone have officers of trading, telephone confirmation and settlement for confirmation and settlement for financial derivatives. The trading financial derivatives. The trading officer should be responsible for officer should be responsible for trading financial derivatives; the trading financial derivatives; the telephone confirmation officer telephone confirmation officer should be responsible for should be responsible for

Articles After Amendment	Article Before Amendment	Note
transaction confirmation with banks by telephone; and the settlement personnel are responsible for arranging the settlement matters pursuant to the transaction agreement. 2. Accounting Division: This division should be responsible for the written confirmation of derivatives. 3.The respective functions of trading, confirmation and settlement shall be performed by different officers. 4. Setting up risk-assessment, risk- supervision, and risk-control personnel who should belong to a different department from the above personnel, and report to the higher level chiefs who are not involved in trading or its relevant position policy implementation.	transaction confirmation with banks by telephone; and the settlement personnel are responsible for arranging the settlement matters pursuant to the transaction agreement. ~~b.~~ The respective functions of trading, confirmation and settlement shall be performed by different officers. ~~c.~~ Setting up risk-assessment, risk-supervision, and risk-control personnel who should belong to a different department from the above personnel, and report to the higher level chiefs who are not involved in trading or its relevant position policy implementation. 2. Accounting Division: This division should be responsible for the written confirmation of derivatives.
IV. PROMULGATION AND AMENDMENT These Procedures were formulated on July	IV. PROMULGATION AND AMENDMENT These Procedures were formulated on July14,	The date of this amendment is added.

Articles After Amendment	Article Before Amendment	Note
14, 2008. The first amendment was made on December 19, 2008. The second amendment was made on September 22, 2009. The third amendment was made on June 14, 2013. The fourth amendment was made on June 12, 2014. The fifth amendment was made on June 15, 2016. The sixth amendment was made on June 12, 2018. The seventh amendment was made on June 24, 2019.	2008. The first amendment was made on December 19, 2008. The second amendment was made on September 22, 2009. The third amendment was made on June 14, 2013. The fourth amendment was made on June 12, 2014. The fifth amendment was made on June 15, 2016. The sixth amendment was made on June 12, 2018.

Nuvoton Technology Corporation

Procedures for Engaging in Financial Derivatives Transactions (After Amendment)

I. PURPOSES

In accordance with the "Procedures of Acquisition or Disposal of Assets" of the Company, the Company enacts these Procedures for Engaging in Financial Derivatives Transactions (the "Procedures") for serving as the basis for execution of derivative transactions.

II. OBJECTIVES

To efficiently manage the income and expenses, assets and liabilities of the Company and to reduce the financial risks resulting from the volatility of the price of financial products (such as, exchange rate and interest rate) and to enhance the competitiveness of the Company and to manage each derivatives transaction, the Company enacts the Procedures to be followed when engaging in derivatives transactions.

III. CONTENTS

Chapter I Principles and Directions of Transactions

Article 1: Scope of Derivatives

The financial derivatives that the Company may engage in refers to forward contracts, option contracts, future contracts, leverage contracts, or swap contracts, whose value is derived from a specific interest rate, financial instrument price, commodity price, exchange rates, index of prices or rates, credit rating or credit index, or other variables; or hybrid contracts combining the above contracts, or hybrid contracts or structured products containing embedded derivative products. The term "forward contracts" does not include insurance contracts, performance contracts, after-sale service contracts, long-term leasing contracts or long-term purchase/sales contracts

Article 2: Strategy of Operation or Hedge

In principle, to engage in financial derivatives transactions should be for hedging the risk resulting from the operation of the Company.

Article 3: Separation of Powers and Obligations

1. Finance Division:

The Finance Division shall have officers of trading, telephone confirmation and settlement for financial derivatives. The trading officer should be

responsible for trading financial derivatives; the telephone confirmation officer should be responsible for transaction confirmation with banks by telephone; and the settlement personnel are responsible for arranging the settlement matters pursuant to the transaction agreement.

Accounting Division: This division should be responsible for the written confirmation of derivatives.
The respective functions of trading, confirmation and settlement shall be performed by different officers.
Setting up risk-assessment, risk-supervision, and risk-control personnel who should belong to a different department from the above personnel, and report to the higher level chiefs who are not involved in trading or its relevant position policy implementation.

Article 4: Trading Limit

The total amount of contracts for derivative transactions engaged by the Company which are not offset should not exceed 50% of the shareholders' equity.

Article 5: Set Stop Loss Limit

The maximum amount of unrealized losses for all contracts of derivatives transaction in which the Company engages in should be the lesser of the amount of 20% of the total amount of contracts or 3% of the shareholders' equity.
The maximum amount of the unrealized losses in one single contract of financial derivatives transactions which the Company engages in shall be 20% of the transaction amount.
If unrealized losses on all contracts or one single contract in the financial derivatives transactions engaged by the Company reach the foregoing ceiling, the Company should announce the material information in accordance with the relevant regulations and report to the Board of Directors after the announcement.

Article 6 Performance Assessment

The performance evaluation shall be based on the evaluation of hedging effect on the financial derivatives transactions engaged by the Company.

Chapter II Operating Procedures

Article 7: Authorized Amount and Level of Transactions

The authorized amount and level of hedging foreign exchange forward

transactions are as follows:

Unit: USD	Total Amount Per Day	Aggregate Net Position
Approver who is one level higher than Center Chief	USD20,000,000 or more	USD30,000,000 or more
Center Chief	USD20,000,000 (inclusive)	USD30,000,000
Chief of Finance Division	USD10,000,000 (inclusive)	USD15,000,000 (inclusive)
Manager of Finance Department	USD2,000,000 (inclusive)	USD3,000,000 (inclusive)

Except for the hedging foreign exchange forward transactions, other products, such as financial transactions, option transactions and composite products shall be reported to the Chairman for approval prior to the execution thereof.
Except that the hedging derivatives transactions shall be conducted according to the foregoing two paragraphs, any major derivatives transactions to be executed by the Company shall be approved by one-half or more of the total members of the Audit Committee and be submitted to the Board of Directors meeting for resolution. Such transactions, without being approved by onehalf or more of the total members of the audit committee, may be conducted with the consent of two-thirds of the total directors, and the resolution of the audit committee shall be recorded in the board meeting minutes. The total members of the audit committee and total directors as referred to in this paragraph shall be the actual incumbent members or directors.

Chapter III Procedures of Public Announcement and Report

Article 8: The Company should make announcements and reports in accordance with the "Procedures of Acquisition or Disposal of Properties" of the Company.

Chapter IV Accounting Method

Article 9: The financial derivatives transactions shall be conducted in accordance with the generally accepted accounting principles (GAAP) and relevant laws and regulations.

Chapter V Internal Control System

Article 10: Risk Management

Credit risk: When the Company chooses the counterparty of the transaction, the counterparty chosen shall be limited to financial institutions with lower credit risks in order to avoid the risk of breach of contract by the counterparty.
Market risk: In relation to derivative products, the risks of changes in market prices arising from the changes in interest rates and foreign exchange rates or other factors.
Liquidity risk: To ensure the market liquidity, the trading counterparty shall be equipped with adequate facilities, information, capital and the ability to trade in any major international market.
Operating risk: The Company shall ensure the full compliance the authorized trading amount and the rules of operating process in order to avoid the operating risk.
Legal risk: The documents that the Company executes with the counterparties shall be reviewed by internal legal personnel or professional lawyers before the formal execution in order to avoid the legal risk.
Cash flow risk: The authorized transaction officer should monitor the cash flow of the Company, in order to make sure that there is sufficient cash.

Article 11: Internal Control

Trading officials shall obtain both the oral and written (or through email) authorization of their supervisors before any transaction. If only oral consent is obtained from the supervisor prior to a transaction, a written or email authorization shall be obtained in the next working day at the latest.
After each transaction is completed, trading officer shall fill out the transaction record in the next working day at the latest and attach thereto the paper-backed written or email authorization. When the transaction record is approved, it is delivered to the written confirmation officer, who examines the confirmation sent from the bank and the transaction record made by the Company and then affixes a seal to the confirmation if the confirmation is correct. A receipt is mailed back to the bank, and the other receipt is retained at the Accounting Division.
The contents of transaction records should specifically state, including but not limited to, the transaction date, counterparty, number, currency, amount, price, mature date, settlement date, approved authorization, the stop-loss limit, the limitation of the total transaction amount, the conditions of the current position and other items meeting the characteristic of each product. The transaction records are prepared to correspond with the characteristic of

the transaction.

The written confirmation officer shall maintain the account book and issue written verification regularly with the corresponding bank. They shall also assist the non-trading department of the Finance Division to conduct its auditing.
The trading officer should examine whether the total transaction amount exceeds the authorized amount on a regular basis and whenever there is any change to the transactions, should produce lists or charts to the chiefs responsible based on the authorized standard for their review.

Article 12: Periodical Evaluation

The center chief should supervise the financial department to mark derivatives to market on a weekly basis. However, evaluation on the hedging transactions arising out of hedging business operating risks shall be taken at least twice a month and spreadsheet of such evaluation is required and submitted to the center chief and high-level managers authorized by the Board of Directors.

Article 13: The Company, when engaging in derivatives transactions, shall establish a log book in which details of the types and amounts of derivatives trading engaged in, Board of Directors approval dates, and periodical evaluation reports shall be recorded in detail for future reference.

Chapter VI Supervision and Management of the Board of Directors

Article 14: When the Company engages in derivatives transactions, its Board of Directors shall faithfully supervise and manage such transactions in accordance with the following principles:
Designate senior management personnel to pay continuous attention to monitoring and controlling derivatives trading risk.
Periodically evaluate whether derivatives trading performance is consistent with established operational strategy and whether the risk undertaken is within the company's permitted scope of tolerance.

Article 15: Senior management personnel authorized by the Board of Directors shall manage derivatives trading in accordance with the following principles:

Periodically evaluate the risk management measures currently employed are appropriate and are faithfully conducted in accordance with relevant laws and regulations and these Procedures.
When irregular circumstances are found in the course of supervision of trading and profit-loss circumstances, appropriate measures shall be adopted and a report immediately made to the Board of Directors; where the

Company has independent directors, an independent director shall be present at the meeting and express an opinion.

Article 16: The Company shall report to the nearest meeting of the Board of Directors after it authorizes the relevant personnel to conduct derivatives trading in accordance with these Procedures.

Chapter VII Internal Audit

Article 17: The internal auditor should periodically check whether the internal control is proper or not. In addition, the internal auditor shall examine each month whether the trading department complies with the Procedures or not and make an audit report. Once Upon finding any material violation, the internal auditor shall give written notice to the Audit Committee.

Chapter VIII Penalty

Article 18: It is handled in accordance with the "Procedures of Acquisition or Disposal of Properties" of the Company.

IV. PROMULGATION AND AMENDMENT

The Procedures shall be approved by one-half or more of all members of the Audit Committee and submitted to the Board of Directors for resolution. The Procedures will take effect after being approved by the shareholders' meeting. Any amendments thereto shall follow the above procedures. If any director has objections to the Procedures and the objection is recorded or made in the form of the written statement, the information about the objections shall be sent to the Audit Committee. The Board of the Directors shall fully take account of the opinion of each independent director when the Board of the Directors discusses the Procedures, and the consent of, or the opinion and reason of objections raised by independent directors shall be recorded in the minutes.

If the aforesaid matter as provided in the preceding Paragraph was not approved by onehalf or more of the all Audit Committee members, it may be approved by two-thirds or more of all directors of the Board of Directors, and the Audit Committee's resolution shall be recorded in the minutes. All Audit Committee members and all directors in this Paragraph shall mean the actual number of persons currently holding those positions.

V. HISTORY

These Procedures were formulated on July 14, 2008.

The first amendment was made on December 19, 2008.

The second amendment was made on September 22, 2009.

The third amendment was made on June 14, 2013. The fourth amendment was made on June 12, 2014. The fifth amendment was made on June 15, 2016. The sixth amendment was made on June 12, 2018. The seventh amendment was made on June 24, 2019.

NUVOTON TECHNOLOGY CORPORATION Comparison Table of Amendments to Operating Procedures For Endorsements And Guarantees

Articles After Amendment Article Before Amendment Note Operating Procedures for Endorsements Regulations Governing Endorsements The wording has been and Guarantees and Guarantees amended by reference to the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies. I. PURPOSE I. PURPOSE The wording has been amended by reference to the To soundly manage endorsements and To soundly manage endorsements and Regulations Governing guarantees for others by the Company guarantees for others by the Company Loaning of Funds and Making and to protect the assets and credit of the and to protect the assets and credit of of Endorsements/Guarantees Company, the Company enacts these the Company, the Company enacts Operating Procedures as a basis for the these Regulations as a basis for the by Public Companies. execution of endorsements and execution of endorsements and guarantees. guarantees.

II. OBJECTIVE II. OBJECTIVE The wording has been Execution of matters relative to Execution of matters relative to amended by reference to the Regulations Governing endorsements and guarantees made by endorsements and guarantees made by Loaning of Funds and Making the Company for others shall be the Company for others shall be of Endorsements/Guarantees governed by these Operating Procedures. governed by these Regulations. Any by Public Companies. Any matter not provided for in these matter not provided for in these Operating Procedures shall be governed Regulations shall be governed by the by the related laws and regulations to related laws and regulations to effectively manage endorsements and effectively manage endorsements and guarantees and to comply with the guarantees and to comply with the Company's goal of steady operation. Company's goal of steady operation. III. CONTENTS III. CONTENTS The wording has been Article 1: The term "endorsements Article 1: The term "endorsements amended by reference to the Regulations Governing and/or guarantees" referred to and/or guarantees" referred in these Operating Procedures to in these Regulations Loaning of Funds and Making of Endorsements/Guarantees include following: include following: by Public Companies. (1)~(3): Omitted (1)~(3): Omitted (4) When the Company (4) When the Company

Articles	After Amendment	Article Before Amendment	Article Before Amendment	Note
	creates a pledge or mortgage on its chattel or real property as security for the loans of another company, theOperating Proceduresshall apply.		creates a pledge or mortgage on its chattel or real property as security for the loans of another company, the Regulations shall apply.
Article 3: Amount ceiling for endorsement/guarantee (1) The limit on the aggregate amount of endorsements and/or guarantees The limit on the aggregate amount of endorsements and/or guarantees made by the Company, or the Company and its subsidiaries together, shall not exceed fifty percent of the Company's net assetsshown in the Company's latest financial report. (2) The limit on the total amount of endorsements and/or guarantees for any single entity The total amount of endorsements and/or guarantees made by the Company or the Company and its subsidiaries together for a singleenterpriseshall		Article 3: Amount ceiling for endorsement/guarantee (1) The limit on the aggregate amount of endorsements and/or guarantees 1. The aggregate amount of endorsements and/or guarantees made by the Companyitselfshall not exceed fifty percent of the Company's net assets. 2.The aggregate amount of endorsements and/or guaranteesmade by the Company and its subsidiaries together shall not exceed fifty percent of the Company's net assets. (2) The limit on the total amount of endorsements and/or guarantees for any single entity 1. The total amount of endorsements and/or guarantees made by the Company for a single company shall not exceedfortypercent of the Company's net		1. Redundant words are deleted and subparagraphs are combined together. 2. The limit on the total amount of endorsements/guarantees for any single entity is adjusted from 40% of the Company’s net worth to 20% of the Company’s net worth, and the restriction relating to the net worth of the endorsee/guarantee company is adjusted from twice the net worth to the net worth, in order to properly control risks. 3. Where the endorsement/ guarantee is provided due to business relationship, the evaluation criteria for whether the endorsed /guaranteed amount is equivalent to the business transaction amount is specified. 4. An exemption is added to exempt the Company from the limit on the total amount of endorsement/guarantee for a single entity in the case of providing
			of endorsements and/or
			guaranteesmade by the Company and its subsidiaries together shall not exceed fifty
	financial report. The limit on the total amount of endorsements and/or guarantees for any single entity The total amount of endorsements and/or guarantees made by the Company or the Company and its subsidiaries together for a singleenterpriseshall
			percent of the
			Company's net assets. The limit on the total amount of endorsements and/or guarantees for any single entity The total amount of endorsements and/or guarantees made by the Company for a single company shall not exceedfortypercent of the Company's net

After Amendment	After Amendment	After Amendment	Article Before Amendment	Article Before Amendment	Note
not exceed twenty percent of the Company's net assetsshown in the Company's latest		twenty	2.	assets; if the Company engages in endorsements and/or guarantees because of business relations~~, the~~ ~~t t f~~	endorsement/guarantee by the Company for the subsidiaries in which the Company directly or indirectly holds 100% of the voting shares, for the Company to have greater flexibility in providing endorsement/guarantee for companies in the same group. 5. The wording in Paragraphs (3)~(4) is revised by reference to the laws and regulations. 6. Independent directors are added to comply with laws and regulations to strengthen corporate governance.
financial report or the net
worth of the
				~~aggregae amoun o~~ ~~dt~~ ~~d/~~
endorsee/guarantee company, whichever is
				~~enorsemens~~ ~~anor~~ ~~t idd b~~
				~~guaranees prove y~~ ~~th C t~~
lower. If the Company engages in endorsements and/or guarantees because of business relations,the aggregate amount of
				~~e ompany o any~~ ~~il hll~~
				~~snge company sa~~ ~~t d ti th~~
				~~no excee wce e~~ ~~t~~ ~~t~~ ~~f~~ ~~th~~
				~~ne~~ ~~asses~~ ~~o~~ ~~e~~ ~~endorsee/guarantee~~ ~~f hih th~~
				~~company or wc e~~ ~~C~~ ~~id~~
endorsements and/or
				~~ompany~~ ~~proves~~ ~~dt/t~~
guarantees provided by
				~~enorsemenguaranee~~ ~~ft t f th~~
the Company to any
				~~or ory percen o e~~ ~~C’ t t~~
single enterprise shall
				~~ompanys ne asses,~~ ~~whichever is lower.~~ The Company and its subsidiaries together for a singlecompany shall not exceedforty percent of the Company's net assets. ~~If~~ ~~th~~ ~~C~~
not exceed the total
trading amount between
the Company and such
endorsee/guarantee company in the most
recent year. The trading amount referred to above	The trading
means the higher of the
				~~e~~ ~~ompany~~ ~~i~~
total purchase amount or
				~~engages~~ ~~n~~ ~~dt~~ ~~d/~~
the total sales amount. The restriction on the
				~~enorsemens~~ ~~anor~~ ~~t b f~~
				~~guaranees ecause o~~ ~~bi~~ ~~lti~~
amount of
				~~usness~~ ~~reaons,~~ ~~th t t~~
endorsements/guarantees
				~~e aggregae amoun~~ ~~f dt d/~~
that the Company may
				~~o enorsemens anor~~ ~~t idd b~~
provide to any singe
				~~guaranees prove y~~ ~~th C t~~
enterprise and the
				~~e ompany o any~~ ~~il hll~~
restriction relating to the
				~~snge company sa~~ ~~t d ti th~~
net worth of the
				~~no excee wce e~~ ~~t~~ ~~t~~ ~~f~~ ~~th~~
endorsee/guarantee company need not apply
				~~ne~~ ~~asses~~ ~~o~~ ~~e~~ ~~endorsee/guarantee~~ ~~f hih th~~
to the Company’s
				~~company or wc e~~ ~~C~~ ~~id~~
endorsements/guarantees
				~~ompany~~ ~~proves~~ ~~dt/t~~
for its subsidiaries in
				~~enorsemenguaranee~~

Articles	After Amendment	Article Before Amendment	Article Before Amendment
(3)	which the Company	(3)	~~ft t f th~~
			~~or ory percen o e~~ ~~C’ t t~~
	directly or indirectly
			~~ompanys ne asses,~~ ~~whichever is lower.~~ Where the Company needs to exceed the limits set out in these Regulationsto satisfy its business needs, it shall obtain approval from the board of directors and half or more of the directors shall act as joint guarantors against loss that may be caused to the Company by the excess endorsement and/or guarantee provided that the conditions set out in theseRegulationsare complied with. It shall also amend the RegulationsGoverning Endorsements and/or Guarantees accordingly and submit the same to the shareholders' meeting for its ratification. If the shareholders' meeting does not approve, the Company shall adopt a plan to discharge the amount in excess within a given time limit.
	holds 100% voting
	shares. Where the Company needs to exceed the limits set out in theseOperating Proceduresto satisfy its business needs, it shall obtain approval from the board of directors and half or more of the directors shall act as joint guarantors against loss that may be caused to the company by the excess endorsement and/or guarantee provided that the conditions set out in these Operating Proceduresare complied with. It shall also amend theOperating Procedures Governing Endorsements and/or Guarantees accordingly and submit the same to the shareholders' meeting for its ratification. If the shareholders' meeting does not approve, the company shall adopt a plan to discharge the amount in excess within a given time limit. Where there are independent directors in the board,

Articles	After Amendment	After Amendment	Article Before Amendment	Article Before Amendment	Note
(4)	when the Company submits theOperating Procedures Governing Endorsements and/or Guarantees to the board meetings for discussion in accordance with the above provisions, it shall take into full consideration each independent director's opinions, which shall be included in the minutes of the board meetings, regardless of whether it was assenting or dissenting opinion. Where changes in circumstances of the Company result in that the entity for which the Company provides endorsement/guarantee ceases to be a qualified entity under Article 2 of the Operating Procedures, or the amount endorsed/guaranteed exceeds the ceiling due to changes in the calculation base for the ceiling, the Company shall adopt rectification plans, submit the relevant rectification	Company Operating	(4)	Where there are independent directors in the board, when the Company submits the RegulationsGoverning Endorsements and/or Guarantees to the board meetings for discussion in accordance with the above provisions, it shall take into full consideration each independent director's opinions, which shall be included in the minutes of the board meetings, regardless of whether it was assenting or dissenting opinion. Where changes in circumstances of the Company result in that the entity for which the Company provides endorsement/guarantee ceases to be a qualified entity under Article 2 of theRegulations,or the amount endorsed/guaranteed exceeds the ceiling due to changes in the calculation base for the ceiling, the Company shall adopt rectification plans, submit the relevant rectificationplans to

100

Articles After Amendment Article Before Amendment Note plans to independent the Audit Committee directors and the Audit and complete the Committee and complete rectification on the rectification on schedule. schedule. Article 6: Operating Procedures of Article 6: Operating Procedures of 1. For the purpose of clarity, Making Endorsements and Making Endorsements and the introductory language Guarantees and Review Guarantees and Review in the first Paragraph is Process Process revised to specify that a Before providing an endorsement or Before providing an endorsement or public issuing company, guarantee for others, the Company shall guarantee for others, the Company when conducting carefully evaluate whether the shall carefully evaluate whether the endorsement/guarantee, endorsement or guarantee is in endorsement or guarantee is in compliance with the "Regulations compliance with the "Regulations shall comply with the procedures formulated by Governing Loaning of Funds and Making Governing Loaning of Funds and of Endorsements and/or Guarantees by Making of Endorsements and/or the Company to comply Public Companies" promulgated by the Guarantees by Public Companies" and with relevant laws and securities regulator and the Company these Regulations. In addition, the regulations. shall handle and review the Company shall handle and review the 2. The wording in endorsement/guarantee matters in following matters. Subparagraph (3) is accordance with these Operating revised and certain Procedures. provision is moved to (1)~(2): Omitted (1)~(2): Omitted Subparagraph (8) to make (3) If necessary, the ceiling on the (3) If necessary, the ceiling on amount of endorsements the amount of endorsements the text more precise. and/or guarantees proposed to and/or guarantees proposed 3. Subparagraphs (6) and (9) be decided by the board of to be decided by the board of are revised to reflect the directors may be decided by directors may be decided by change in the head-inthe chairman of the board of the chairman of the board of charge based on the power directors provided the amount directors provided the and liability of each is within ten percent of the amount is within ten percent business in the Company's net worth shown in of the Company's net worth ' the Company s latest financial and then be reported to the organization. report and then be reported to upcoming board of directors 4. In relation to the basis for the upcoming board of for ratification; provided that calculation of paid-in directors for ratification. an endorsement/guarantee capital, the references to Where there are independent among the companies in paragraph numbers are directors in the board, when which the Company directly revised to reflect the making an endorsement or or indirectly holds 90% or guarantee for others, the more of voting shares cannot

101

Articles After Amendment	Articles After Amendment	Article Before Amendment	Article Before Amendment	Note
Company shall take into full consideration each independent director's opinions, which shall be included in the minutes of the board meetings, regardless of whether it was assenting or dissenting opinion. (4)~(5): Omitted (6) The Finance Division shall periodically prepare and report the statement of details of guarantees for the purpose of controlling and monitoring the financial conditions and usage of fund of the guarantee company. Should any significant change regarding the aforementioned matters arise, the Finance Division shall immediately report to the Chairman of the board of directors and appropriate measures shall be taken in accordance with the instructions. (7) Omitted (8) A subsidiary in which the		be proceeded unless submitted to and approvedby the board of director. Where there are independent directors in the board, when making an endorsement or guarantee for others, the Company shall take into full consideration each independent director's opinions, which shall be included in the minutes of the board meetings, regardless of whether it was assenting or dissenting opinion. (4)~(5): Omitted (6) The Finance Division shall periodically prepare and report the statement of details of guarantees for the purpose of controlling and monitoring the financial conditions and usage of fund of the guarantee company. Should any significant change regarding the aforementioned matters arise, the Finance Division shall immediately report to ~~the~~ ~~President~~ ~~and~~ the Chairman of the board of directors and appropriate measures shall be taken in accordance with the instructions. (7) Omitted	be proceeded unless	adjustment to the paragraph order.
	Company owns 90% or more
	of its voting shares cannot
	provide any

102

Articles After Amendment	Articles After Amendment	Article Before Amendment
(9)	endorsement/guarantee according to Paragraph (2) of	(8)The Finance Division shall examine the net worth of the company for which the Company provides endorsement/guarantee at the end of each month. If the net worth of such company is lower than 1/2 of its paid-in capital, the Finance Division shall prepare a valuation report and submit such report tothe President andthe Chairman in order to determine whether to continue to provide endorsement/guarantee to such company. If the Company will continue to provide endorsement/guarantee for such company, the Finance Division shall obtain a negotiable instrument guaranteed by another person with the issuing amount equivalent to the amount of endorsement/guarantee or
	Article 2 unless such
	endorsement/guarantee has
	been submitted to and
	approved by the board of
	directors of the Company in
	advance; provided that the
	endorsement/guarantee by and
	among subsidiaries in which
	the Company directly or
	indirectly holds 100% voting
	shares is not subject to the
	above restrictions. The Finance Division shall examine the net worth of the company for which the Company provides endorsement/guarantee at the end of each month. If the net worth of such company is lower than 1/2 of its paid-in capital, the Finance Division shall prepare a valuation report and submit such report to the Chairman in order to determine whether to continue to provide endorsement/guarantee to such company. If the Company will continue to provide endorsement/guarantee for such company, the Finance Division shall obtain a negotiable instrument guaranteed by another person with the issuing amount equivalent to the amount of endorsement/guarantee or other security; provided that, no guaranteed negotiable instrument or security is

103

Articles After Amendment	Article Before Amendment	Note
required if the company for which the Company provides the endorsement/guarantee is directly and indirectly wholly owned by the Company. (10)During the period that the Company receives the endorsement/guarantee or loan provided by its parent company, the Company and each of its Subsidiaries shall not engage in any endorsement/guarantee. (11)In the case of a subsidiary with shares having no par value or a par value other than NT$10, the paid-in capital calculation pursuant to Paragraph(9) of this Article shall be the share capital plus premium for issuance of shares above par value. (Hereafter Omitted)	other security; provided that, no guaranteed negotiable instrument or security is required if the company for which the Company provides the endorsement/guarantee is directly and indirectly wholly owned by the Company. (9)During the period that the Company receives the endorsement/guarantee or loan provided by its parent company, the Company and each of its Subsidiaries shall not engage in any endorsement/guarantee. (10)In the case of a subsidiary with shares having no par value or a par value other than NT$10, the paid-in capital calculation pursuant to Paragraph(8)of this Article shall be the share capital plus premium for issuance of shares above par value. (Hereafter Omitted)
Article 9: Internal Audit The Company's internal auditors shall audit the procedures for processing endorsements and guarantees and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notify the independent directors andthe Audit Committee in writing of any material violation matters.	Article 9: Internal Audit The Company's internal auditors shall audit the procedures for processing endorsements and guarantees and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notify the Audit Committee in writing of any material violation matters.	Independent directors are added to comply with laws and regulations to strengthen corporate governance.
Article 10: Procedures of Announcement	Article 10: Procedures of	Considering that the

104

	Articles After Amendment		Article Before Amendment	Note
(1) (2) (3) (4)	and Report Omitted If the balance of endorsement/guarantee reaches any of the following thresholds, the Company shall announce and report within two days beginning immediately from the same day of the date of occurrence. The date of occurrence referred to above means the date of contract signing, date of payment, date of board of directors resolutions, or other dates that can confirm the endorsed/guaranteed partyand monetary amount of the endorsement/ guarantee,whichever date is earlier. 1~2 Omitted 3. The balance of endorsement/guarantee of the Company and its subsidiaries provided for a single entity reaches NT$10 million or more, and the aggregate balance of endorsement/guarantee provided for,the book value of investmentunder the equity methodin and funds lending to, such entity reaches thirty percent or more of the net worth of the Company as stated in its latest financial statement. 4 Omitted Omitted The Company shall evaluate or record the contingent loss for endorsements and/or guarantees and	(1) (2) (3) (4)	Announcement and Report Omitted If the balance of endorsement/guarantee reaches any of the following thresholds, the Company shall announce and report within two days beginning immediately from the same day of the date of occurrence. The date of occurrence referred to above means the date of contract signin~~g for the~~ ~~transaction,~~date of payment, date of board of directors resolutions, or other dates that can confirm the counterparty andmonetary amount of the endorsement/ guarantee ~~transaction,~~whichever date is earlier. 1~2 Omitted 3. The balance of endorsement/guarantee of the Company and its subsidiaries provided for a single entity reaches NT$10 million or more, and the aggregate balance of endorsement/guarantee provided for, long-term investment in and funds lending to, such entity reaches thirty percent or more of the net worth of the Company as stated in its latest financial statement. 4 Omitted Omitted The Company shall evaluate or record the contingent loss for endorsements and/or guarantees and shall adequatelydisclose	endorsement/guarantee is not a transaction in nature, certain wording in this article has been amended to comply with the laws and regulations.

105

	Articles After Amendment	Articles After Amendment		Article Before Amendment	Note
	shall adequately disclose information on endorsements and/or guarantees in its financial reports and provide relevant information to the certified			information on endorsements and/or guarantees in its financial reports and providethe certified public accountants with relevant
	public accountants for them to			information to conduct necessary
	conduct necessary audit procedures.			audit procedures.

Article 11: Subsidiary and parent company net worth 1. "Subsidiary" and "parent company" as set forth in theseOperating Proceduresshall be determined as per the Regulations Governing the Preparation of Financial Reports by Securities Issuers. 2. "Net worth" as set forth in these Operating Proceduresmeans the equity attributable to owners of the parent company on the balance sheet under the Regulations Governing the Preparation of Financial Reports by Securities Issuers.		parent company" Operating	Article 11: Subsidiary and parent company net worth 1. "Subsidiary" and "parent company" as set forth in these Regulationsshall be determined as per the Regulations Governing the Preparation of Financial Reports by Securities Issuers. 2. "Net worth" as set forth in these Regulationsmeans the equity attributable to owners of the parent company on the balance sheet under the Regulations Governing the Preparation of Financial Reports by Securities Issuers.		Certain wording has been amended by reference to the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies.
Article 12: Penalty In order to prevent managers or personnel in charge from taking advantage of their offices to engage in illegal endorsements and/or guarantees, when managers or personnel in charge violate theProceduresor the related laws and regulations, the Human Resource Department shall provide a proposal of penalty according to the severity of violation based on the evidence provided by the division in charge or audit division and approved by the head-in-charge. Penalty imposed on managers shall be submitted to the Audit Committee and			Article 12: Penalty In order to prevent managers or personnel in charge from taking advantage of their offices to engage in illegal endorsements and/or guarantees, when managers or personnel in charge violate the Regulationsor the related laws and regulations, the Human Resource Department shall provide a proposal of penalty according to the severity of violation based on the evidence provided by the division in charge or audit division.Penalty imposed on personnel in charge shall be assented		1. Certain wording has been amended by reference to the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies. 2. The wording has been amended according to the adjustment to the power and liability of each business in the organization.
			by the President and approved by the

106

Articles After Amendment	Article Before Amendment	Note
the board of directors for resolution. In the event of unrecoverable loss incurred froman individual'sviolation of theOperating Proceduresor the related laws and regulations with intent or negligence, suspension may be imposed after being approved by the head-in- charge. The aforementioned managers shall mean the ones set up in accordance with the rulingissued by the Securities and Futures Commission dated March 27, 2003 (Ref. No.: Tai-Tsai-Jen-(3)- 0920001301) and the aforementioned personnel in charge shall mean personnel involved and relevant supervisors in charge of review and approval of execution.	Chairman of the board of directors.
	Penalty imposed on managers shall be assented by the Chairman of the board
	of directors andsubmitted to the board of directors for resolution. In the event of unrecoverable loss incurred from violation of the Regulationsor the related laws and regulations with intent or negligence, suspension may be imposed on
	personnel in charge after being
	approved by the President and
	suspension may be imposedon managers after being approved by the
	Chairman of the board of directors. The aforementioned managers shall mean the ones set up in accordance with the ruling (Ref. No.: Tai-Tsai-Jen- (3)-0920001301) and the aforementioned personnel in charge shall mean personnel involved and relevant supervisors in charge of review and approval of execution.
Article 13: Control procedure to subsidiaries in providing endorsement /guarantee The Company shall require all of its subsidiaries to formulate their own "Operating Procedures forEndorsement and Guarantee" in accordance with the "Regulations Governing Lending Funds and Providing Endorsement and Guarantee by Public Offering Companies" promulgated by the competent authorities and the "Operating Procedures for Endorsement and Guarantee" of the Company. Any endorsement/guaranteeprovided bythe	Article 13: Control procedure to subsidiaries in providing endorsement /guarantee The Company shall require all of its subsidiaries to formulate their own "RegulationsGoverning Endorsement and Guarantee" in accordance with the "Regulations Governing Lending Funds and Providing Endorsement and Guarantee by Public Offering Companies" promulgated by the competent authorities and the "Regulations GoverningEndorsement and Guarantee" of the Company. Any endorsement/guaranteeprovided by	Certain wording has been amended by reference to the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies.

107

Articles After Amendment Article Before Amendment Note subsidiaries shall comply with their own the subsidiaries shall comply with their "Operating Procedures for Endorsement own "Regulations Governing and Guarantee", Endorsement and Guarantee". IV. VALIDATION AND IV. VALIDATION AND AMENDMENTS AMENDMENTS These Operating Procedures shall be These Regulations shall be approved approved by at least one half of all the by at least one half of all the Audit audit committee members and then Committee members and then Making submitted to the Board of Directors for submitted to the Board of Directors for resolution. After approved by the Board resolution. After approved by the of Directors, the Regulations shall be Board of Directors, the Regulations submitted to the shareholders' meeting shall be submitted to the shareholders' for approval. Where any director meeting for approval. Where any Article 14-3 expresses dissent and it is contained in director expresses dissent and it is the minutes or a written statement, the contained in the minutes or a written Act to Company shall submit the dissenting statement, the Company shall submit opinions to the audit committee and for the dissenting opinions to the audit discussion by the shareholders' meeting. committee and for discussion by the The same shall apply to any amendments shareholders' meeting. The same shall to the Procedures. When the apply to any amendments to the Procedures are submitted by the Regulations. When the Regulations Company to the Board of Directors for are submitted by the Company to the discussion in accordance with relevant Board of Directors for discussion in rules, the Board of Directors shall take accordance with relevant rules, the into full consideration each independent Board of Directors shall take into full director's opinions; any dissent from or consideration each independent qualification by the independent director's opinions; the independent directors (if any) shall be included in the directors' opinions specifically minutes of the Board of Directors' expressing assent or dissent and the meetings. reasons for dissent shall be included in the minutes of the Board of Directors' If approval of the majority of all audit meetings. committee members as required in the preceding paragraph is not obtained, the If approval of the majority of all audit Regulations or any amendment hereto committee members as required in the may be implemented if approved by preceding paragraph is not obtained, more than two-thirds of all directors, and the Regulations or any amendment the resolution of the audit committee hereto may be implemented if shall be recorded in the meeting minutes approved by more than two-thirds of of the Board of Directors. The terms "all all directors, and the resolution of the audit committee members" and "all audit committee shall be recorded in

Certain wording has been amended by reference to the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies.
Certain wording has been revised by reference to Article 14-3 of the Securities and Exchanges Act to reflect the amendment to the law.

108

Articles After Amendment	Article Before Amendment	Note
directors" in this paragraph shall be counted as the actual number of persons currently holding those positions.	the meeting minutes of the Board of Directors. The terms "all audit committee members" and "all directors" in this paragraph shall be counted as the actual number of persons currently holding those positions.

109

Nuvoton Technology Corporation

Operating Procedures for Endorsements and Guarantees (After Amendment)

I. PURPOSE

To soundly manage endorsements and guarantees for others by the Company and to protect the assets and credit of the Company, the Company enacts these Operating Procedures as a basis for the execution of endorsements and guarantees.

II. OBJECTIVE

Execution of matters relative to endorsements and guarantees made by the Company for others shall be governed by these Operating Procedures. Any matter not provided for in these Operating Procedures shall be governed by the related laws and regulations to effectively manage endorsements and guarantees and to comply with the Company's goal of steady operation.

III. CONTENTS

Article 1:

The term "endorsements and/or guarantees" referred to in the Operating Procedures include the following:

(1) Endorsements and/or guarantees in connection with financing facilities, including:
Financing facilities in connection with discounts on customers' check;
Endorsements and/or guarantees provided in connection with financing facilities for other companies; and
Instruments issued to non-financial enterprises as security in connection with the financing facilities for the Company.
(2) Endorsements and/or guarantees in connection with customs duty, which mean endorsements and/or guarantees made for the Company or other companies with respect to matters involving customs duty;
(3) Other endorsements and/or guarantees, which cannot be categorized in items (1) and (2) as mentioned above; and
(4) When the Company creates a pledge or mortgage on its chattel or real property as security for the loans of another company, the Operating Procedures shall apply.

Article 2: Parties for whom the Company may provide endorsement/guarantee

(1) The Company may provide endorsement/guarantee for the following:
A company who has business relationship with the Company.
A company in which the Company directly and indirectly owns more than fifty

110

percent of the voting shares.

A company that directly and indirectly owns more than fifty percent of the voting shares of the Company.
(2) The companies in which the Company directly and indirectly owns ninety percent or more of voting shares may provide endorsement/guarantee for one another; provided that, the amount of endorsement/guarantee provided by the Company may not exceed ten percent of the net worth shown in the Company's latest financial report; provided further that, the endorsement/guarantee provided by a company which is directly and indirectly wholly owned by the Company to another company which is also directly and indirectly wholly owned by the Company is not subject to the restriction provided in the immediately preceding proviso.
(3) Where the Company fulfills its contractual obligations by providing mutual endorsement/guarantee for another company in the same industry or the collaborative builders for purposes of undertaking a construction project, or where all the shareholders make endorsement/guarantee for their jointly invested company in proportion to their shareholding percentages, such endorsement/guarantee may be exempted from the restrictions under the preceding two paragraphs. The investment as mentioned in this paragraph means investment directly made by the Company or made through a company in which the Company owns one hundred percent of the voting shares.

Article 3: Amount ceiling for endorsement/guarantee

(1) The limit on the aggregate amount of endorsements and/or guarantees The limit on the aggregate amount of endorsements and/or guarantees made by the Company, or the Company and its subsidiaries together, shall not exceed fifty percent of the Company's net assets shown in the Company's latest financial report.
(2) The limit on the total amount of endorsements and/or guarantees for any single entity The total amount of endorsements and/or guarantees made by the Company or the Company and its subsidiaries together for a single enterprise shall not exceed twenty percent of the Company's net assets shown in the Company's latest financial report or the net worth of the endorsee/guarantee company, whichever is lower.
If the Company engages in endorsements and/or guarantees because of business relations, the aggregate amount of endorsements and/or guarantees provided by the Company to any single enterprise shall not exceed the total trading amount between the Company and such endorsee/guarantee company in the most recent year. The trading amount referred to above means the higher of the total purchase amount or the total sales amount.

The restriction on the amount of endorsements/guarantees that the Company may

111

provide to any singe enterprise and the restriction relating to the net worth of the endorsee/guarantee company need not apply to the Company’s endorsements/guarantees for its subsidiaries in which the Company directly or indirectly holds 100% voting shares.

(3) Where the Company needs to exceed the limits set out in these Operating Procedures to satisfy its business needs, it shall obtain approval from the board of directors and half or more of the directors shall act as joint guarantors against loss that may be caused to the company by the excess endorsement and/or guarantee provided that the conditions set out in these Operating Procedures are complied with. It shall also amend the Operating Procedures Governing Endorsements and/or Guarantees accordingly and submit the same to the shareholders' meeting for its ratification. If the shareholders' meeting does not approve, the company shall adopt a plan to discharge the amount in excess within a given time limit. Where there are independent directors in the board, when the Company submits the Operating Procedures Governing Endorsements and/or Guarantees to the board meetings for discussion in accordance with the above provisions, it shall take into full consideration each independent director's opinions, which shall be included in the minutes of the board meetings, regardless of whether it was assenting or dissenting opinion.
(4) Where changes in circumstances of the Company result in that the entity for which the Company provides endorsement/guarantee ceases to be a qualified entity under Article 2 of the Operating Procedures, or the amount endorsed/guaranteed exceeds the ceiling due to changes in the calculation base for the ceiling, the Company shall adopt rectification plans, submit the relevant rectification plans to independent directors and the Audit Committee and complete the rectification on schedule.

Article 4: Corporate Chops for Endorsements and Guarantees

The Company shall use the corporate chop registered with the Ministry of Economic Affairs as the dedicated chop for endorsements and/or guarantees.

When making a guarantee for a foreign company, the Company shall have the Guarantee Agreement signed by a person authorized by the board of directors.

Article 5: Custody of Corporate Chops and Notes for Endorsements and Guarantees

The corporate chops and notes for endorsements and/or guarantees shall be kept in the custody of a designated person (the "Custodian") approved by the board of directors and may be used to seal or issue negotiable instruments only in prescribed procedures. The Company shall submit the Custodian of the seals for endorsements and/or guarantees to the board of directors for its approval. The same shall apply to any change to the Custodian.

112

Article 6: Operating Procedures of Making Endorsements and Guarantees and Review Process

Before making an endorsement or guarantee for others, the Company shall carefully evaluate whether the endorsement or guarantee is in compliance with the "Regulations Governing Loaning of Funds and Making of Endorsements and/or Guarantees by Public Companies" promulgated by the securities regulator and the Company shall handle and review the endorsement/guarantee matters in accordance with these Operating Procedures.

(1) The guarantee company shall provide detailed financial information to the Finance Department of the Company.
(2) The Finance Division shall prepare a report specifically stating the financial information of the guarantee company, examining the necessity and reasonableness of endorsements and/or guarantees, credit status and risk assessment of the entity for which the endorsement and/or guarantee is made and the impact on the Company's operational risks, financial condition and shareholders' equity. Such report shall be submitted to the chairman of the board of directors for approval.
(3) If necessary, the ceiling on the amount of endorsements and/or guarantees proposed to be decided by the board of directors may be decided by the chairman of the board of directors provided the amount is within ten percent of the Company's net worth shown in the Company's latest financial report and then be reported to the upcoming board of directors for ratification. Where there are independent directors in the board, when making an endorsement or guarantee for others, the Company shall take into full consideration each independent director's opinions, which shall be included in the minutes of the board meetings, regardless of whether it was assenting or dissenting opinion.
(4) The Chairman of the board of directors may approve the endorsement and/or guarantee made for the guarantee company within the ceiling decided by the board of directors and refer to the Finance Department for execution.
(5) The endorsement and/or guarantee may be made by the Finance Department after receiving the guarantee notes of the same term and same amount and collaterals where necessary. Appraisal of the collateral shall be done carefully by the Finance Department. However, where the subsidiaries are one hundred percent invested directly and indirectly by the Company, receipt of guarantee notes and collateral can exempt.
(6) The Finance Department shall periodically prepare and report the statement of details of guarantees for the purpose of controlling and monitoring the financial conditions and usage of fund of the guarantee company. Should any significant change regarding the aforementioned matters arise, the Finance Department shall immediately report to the Chairman of the board of directors and appropriate

113

measures shall be taken in accordance with the instructions.

(7) The Finance Division shall prepare a memorandum book and truthfully record the following information: entities for which the approved endorsements and/or guarantees are made, amount, date of approval by the board of directors or the chairman of the board of directors, endorsement and/or guarantee date, and matters to be carefully evaluated under paragraph (2) of this Article.
(8) A subsidiary in which the Company owns 90% or more of its voting shares cannot provide any endorsement/guarantee according to Paragraph (2) of Article 2 hereof unless such endorsement/guarantee has been submitted to and approved by the board of director of the Company in advance; provided that the endorsement/guarantee by and among subsidiaries in which the Company directly or indirectly holds 100% voting shares is not subject to the above restrictions.
(9) The Finance Division shall examine the net worth of the company for which the Company provides endorsement/guarantee at the end of each month. If the net worth of such company is lower than 1/2 of its paid-in capital, the Finance Division shall prepare a valuation report and submit such report to the Chairman in order to determine whether to continue to provide endorsement/guarantee to such company. If the Company will continue to provide endorsement/guarantee for such company, the Finance Division shall obtain a negotiable instrument guaranteed by another person with the issuing amount equivalent to the amount of endorsement/guarantee or other security; provided that, no guaranteed negotiable instrument or security is required if the company for which the Company provides the endorsement/guarantee is directly and indirectly wholly owned by the Company.
(10) During the period that the Company receives the endorsement/guarantee or loan provided by its parent company, the Company and each of its Subsidiaries shall not engage in any endorsement/guarantee.
(11) In the case of a subsidiary with shares having no par value or a par value other than NT$10, the paid-in capital calculation pursuant to Paragraph (9) of this Article shall be the share capital plus premium for issuance of shares above par value.

Provision of material endorsement or guarantee by the Company shall be approved by onehalf or more of all members of the Audit Committee and submitted to the board of directors meeting for resolution. If the aforesaid matter was not approved by one-half or more of the all Audit Committee members, it may be approved by two-thirds or more of all directors of the board of directors, and the Audit Committee's resolution shall be recorded in the minutes. All Audit Committee members and all directors in this Paragraph shall mean the actual number of persons currently holding those positions.

Article 7: Renewal of Endorsements and/or Guarantees

114

Renewal of endorsements and/or guarantees shall be conducted in accordance with Article 6.

Article 8: Cancellation of Endorsement and Guarantee Record

When the cancellation of endorsements and/or guarantees is requested by the guarantee company or the Company, the Finance Department shall process it in accordance with the following procedures:

(1) It shall be confirmed that the guarantee company has cancelled the record of the liability of guarantee.
(2) A copy of cancellation of the guarantee notes by the guarantee company shall be obtained.

Article 9: Internal Audit

The Company's internal auditors shall audit the procedures for processing endorsements and guarantees and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notify the independent directors and the Audit Committee in writing of any material violation matters.

Article 10: Procedures of Announcement and Report

(1) The Company shall announce and report the previous month's balance of endorsements and/or guarantees of itself and its subsidiaries by the 10th day of each month.
(2) If the balance of endorsement/guarantee reaches any of the following thresholds, the Company shall announce and report within two days beginning immediately from the same day of the date of occurrence. The date of occurrence referred to above means the date of contract signing, date of payment, date of board of Directors resolutions, or other dates that can confirm the endorsed/guaranteed party and monetary amount of the endorsement/ guarantee, whichever date is earlier.
The balance of endorsement/guarantee of the Company and its subsidiaries reaches fifty percent or more of the net worth of the Company as stated in its latest financial statement.
The balance of endorsement/guarantee of the Company and its subsidiaries provided for a single entity reaches twenty percent or more of the net worth of the Company as stated in its latest financial statement.
The balance of endorsement/guarantee of the Company and its subsidiaries provided for a single entity reaches NT$10 million or more, and the aggregate balance of endorsement/guarantee provided for, the book value of investment under the equity method in and funds lending to, such entity reaches thirty percent

115

or more of the net worth of the Company as stated in its latest financial statement.

The amount of new endorsement/guarantee provided by the Company or its subsidiaries reaches NT$30 million and reaches five percent of the net worth of the Company as stated in its latest financial statement.
(3) Where any subsidiary of the Company is not a domestic public offering company, the Company shall make the required announcement and report on behalf of such subsidiary if the situation prescribed in the preceding Item 4 occurs.
(4) The Company shall evaluate or record the contingent loss for endorsements and/or guarantees and shall adequately disclose information on endorsements and/or guarantees in its financial reports and provide relevant information to the certified public accountants for them to conduct necessary audit procedures.

Article 11: Subsidiary and parent company net worth

(1) "Subsidiary" and "parent company" as set forth in these Operating Procedures shall be determined as per the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
(2) "Net worth" as set forth in these Operating Procedures means the equity attributable to owners of the parent company on the balance sheet under the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Article 12: Penalty

In order to prevent managers or personnel in charge from taking advantage of their offices to engage in illegal endorsements and/or guarantees, when managers or personnel in charge violate the Operating Procedures or the related laws and regulations, the Human Resource Department shall provide a proposal of penalty according to the severity of violation based on the evidence provided by the division in charge or audit division and approved by the head-in-charge. Penalty imposed on managers shall be submitted to the Audit Committee and the board of directors for resolution.

In the event of unrecoverable loss incurred from an individual's violation of the Operating Procedures or the related laws and regulations with intent or negligence, suspension may be imposed after being approved by the head-in-charge.

The aforementioned managers shall mean the ones set up in accordance with the ruling issued by the Securities and Futures Commission dated March 27, 2003 (Ref. No.: TaiTsai-Jen-(3)-0920001301) and the aforementioned personnel in charge shall mean personnel involved and relevant supervisors in charge of review and approval of execution.

Article 13: Control procedure to subsidiaries in providing endorsement /guarantee

The Company shall require all of its subsidiaries to formulate their own "Operating

116

Procedures for Endorsement and Guarantee" in accordance with the "Regulations Governing Lending Funds and Providing Endorsement and Guarantee by Public Offering Companies" promulgated by the competent authorities and the "Operating Procedures for Endorsement and Guarantee" of the Company. Any endorsement/guarantee provided by the subsidiaries shall comply with their own "Operating Procedures for Endorsement and Guarantee".

IV. VALIDATION AND AMENDMENTS

These Operating Procedures shall be approved by at least one half of all the audit committee members and then submitted to the Board of Directors for resolution. After approved by the Board of Directors, the Regulations shall be submitted to the shareholders' meeting for approval. Where any director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the dissenting opinions to the audit committee and for discussion by the shareholders' meeting. The same shall apply to any amendments to the Operating Procedures. When the Operating Procedures are submitted by the Company to the Board of Directors for discussion in accordance with relevant rules, the Board of Directors shall take into full consideration each independent director's opinions; any dissent from or qualification by the independent directors (if any) shall be included in the minutes of the Board of Directors' meetings.

If approval of the majority of all audit committee members as required in the preceding paragraph is not obtained, the Regulations or any amendment hereto may be implemented if approved by more than two-thirds of all directors, and the resolution of the audit committee shall be recorded in the meeting minutes of the Board of Directors. The terms "all audit committee members" and "all directors" in this paragraph shall be counted as the actual number of persons currently holding those positions

V. Reference Documents

Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies.

117

NUVOTON TECHNOLOGY CORPORATION

Comparison Table of Amendments to Operating Procedures for Loaning of Funds

Articles After Amendment	Article Before Amendment	Note
Article 1: Parties Eligible for Loans from the Company (1) The Company shall not grant loans to any shareholder or anyone except for the following: 1. Companies which have business dealings with the Company, to the extent that the loan is for their working capital needs only; and 2. Companies having short-term financing needs in which the Company holds, whether directly or indirectly, fifty percent or more of the voting shares. (2)The restrictions set out in Paragraphs 1 and 2 of Article 2and Article 4 hereof may not apply tothe intercompany loans between foreign companies in which the Company holds, whether directly or indirectly, 100% of the voting shares, or the intercompany loans granted by foreign companies in which the Company holds, whether directly or indirectly, 100% of the voting shares, to the Company; provided, however, that the Company shall prescribe the aggregate maximum loan amount that the Company can provide and the maximum loan amount permitted to be lent to a single borrower and specify the term	Article 1: Parties Eligible for Loans from the Company The Company may grant loans only to	1. This Article has been amended to explicitly define parties to which loans may be granted and the nature thereof. "Business dealings" shall be limited to the working capital financing relating to the purchase and sale of merchandise by both parties, excluding lending that does not involve business dealings, in order to properly manage risks. 2. To comply with the amendment to the law and improve the flexibility of financing between members within the group, in view that Article 15 of the Company Act does not apply to foreign companies, intercompany loans granted to the Company by foreign companies in which the Company holds directly or indirectly 100% of the voting shares are exempt from the loan limits and one-year repayment term.
	companies or firms which have
	business dealings with the Company or
	short-term financing needs and in
	which the Company invests and holds
	fifty percent or more shareholding
	("Borrower")."Short-term"referred to
	above shall mean a period of less than
	one year. The restriction set out in Paragraphs 2 and 3 of Article 2, Article 4 andArticle 5hereof shall apply to the intercompany loans between foreign companies in which the Company holds, whether directly or indirectly, 100% of the voting shares.

118

	of loan in these Procedures
	according to the Regulations
	Governing Loans and Endorsements
	/Guarantees by Public Companies
	promulgated by the securities
	authority.
Article 2: Maximum amount of loans granted to other parties (1)Aggregate maximum loan amount The aggregate maximum loan amount granted to others may not exceed twenty percent of the net worth of the Companyshown in its latest financial report. (2) The maximum amount of loans for each borrower The aggregate amount of loans granted to the same Borrower having business dealings with the Company and short-term financing needs shall not exceed the		Article 2:~~Reasons, necessities and~~ maximum amount of loans granted to other parties ~~(1) The Reasons and Necessity of Fund~~ ~~Loaning~~ ~~The Company may engage in~~ ~~fund loaning to other companies~~ ~~or enterprises having business~~ ~~transactions with the Company~~ ~~or the necessity of short-term~~ ~~fund needs. The aforementioned~~ ~~fund loaning for the necessity of~~ ~~short-term fund needs shall be~~ ~~confined to business needs or~~ ~~revolving fund for operation of~~ ~~other companies or enterprises or~~ ~~other circumstances where the~~ ~~Company's board of directors~~ ~~consents to the necessity of short-~~ ~~term fund needs.~~ (2)The maximum amount of loans for each borrower The aggregate amount of loans granted to the same Borrower having business dealings with the Company and short-term financing needs shall not exceed		~~R iti d~~	1. The reasons and necessity of lending specified in the original Article are subject to Article 1, and the relevant evaluation procedures have been conducted pursuant to Subparagraph (2) of Paragraph 1 of Article 3 (Operating Procedures for Loaning of Funds and Review Process); therefore, redundant words have been deleted. In the meantime, the order of the paragraphs has been rearranged. 2. The order of the paragraphs (aggregate maximum loan amount of the Company and maximum loan amount for each borrower) was switched, such that the description regarding the aggregate maximum loan amount of the Company precedes the description of the maximum loan amount for each borrower, to be consistent with the description order in the Regulations Governing Loaning of Funds and Makingof
			~~e easons an ecessy o un~~ ~~Loaning~~ ~~The Company may engage in~~ ~~fund loaning to other companies~~ ~~or enterprises having business~~ ~~transactions with the Company~~ ~~or the necessity of short-term~~ ~~fund needs. The aforementioned~~ ~~fund loaning for the necessity of~~ ~~short-term fund needs shall be~~ ~~confined to business needs or~~ ~~revolving fund for operation of~~ ~~other companies or enterprises or~~ ~~other circumstances where the~~ ~~Company's board of directors~~ ~~consents to the necessity of short-~~ ~~term fund needs.~~ The maximum amount of loans for each borrower The aggregate amount of loans granted to the same Borrower having business dealings with the Company and short-term financing needs shall not exceed

119

(3) (4)	Borrower's net worthshown in the Borrower's latest financial report	Borrower's net worthshown in the Borrower's latest financial report	(3) (4)	Endorsements/Guarantees by Public Companies and the Procedures for Endorsement and Guarantee of the Company. 3. The wording has been amended by reference to laws and regulations. In addition, the Borrower’s net worth becomes the maximum loan amount, for proper risk management and to prevent making excessive and large loans to prejudice the shareholders’ rights and interests. Further, to simplify, the amount of money lent for business dealings shall mean the total amount of business transaction. 4. Explanation provided in laws and regulation is newly added. 5. To strengthen corporate governance, independent directors have been added in Paragraph (4) in response to the amendment to the law.
	or ten percent of the Company Company's latest	the net worth of shown in the
	article means the cumulative
	balance of the Company's short-
	term financing. Where changes in circumstances in respect of the Company cause the entity to which the Company gives loans to cease to be an eligible entity under theProceduresor the loan balance exceeds the maximum loan amount, the Company shall draft an improvement plan, submit the same tothe independent directors andthe Audit Committee and complete the improvement on schedule.
Article 3: Operating Procedures of Fund Loaning and Review Process Before loaning funds to others, the Company shall carefully evaluate			Article 3: Operating Procedures of Fund Loaning and Review Process Before loaning funds~~of the Company~~ to others, the Companyshall carefully	1. The language in the introductory paragraph and Paragraphs (1) to (3) was revised byreference

120

whether it is in compliance with the "Regulations Governing Loaning of Funds and Providing Endorsements and/or Guarantees by Public Companies" promulgated by the securities authority	evaluate whether it is in compliance with the "Regulations Governing Loaning of Funds and Providing Endorsements and/or Guarantees by Public Companies" and these Procedures.The Company may make loans to others only after the results of evaluation have been submitted to and resolved upon by the Board of Directors. The Company shall not authorize any other person to make such decision. Where the independent directors have been installed, when loaning funds to others, the Company shall take into full consideration each independent director's opinions; the independent directors' opinions specifically expressing assent or dissent and their reasons for dissent shall be included in the minutes of the board meetings. (1) When the Company handles the matters of fund loaning, the necessary financial information and guarantee shall be provided by the Borrower to the Finance Division of the Company in advance. (2) The Finance Division of the Company shall prepare a report specifically stating the borrower, reason, amount, term, interest rate, method of repayment, source of funds, collateral or other methods of guarantee and other necessary matters. The borrower's credit status and risk assessment and analysis of the impact of such fund loaning upon the Company's business operation, financial condition and shareholders' equity shall also be made by the Finance	to the Regulations Governing Loaning of Funds and Endorsements/ Guarantees by Public Companies. 2. The approver has been changed in accordance with the power and liability of each business in the organization. 3. The order of paragraphs is adjusted.
and theseOperating Procedures.The Company may make loans to others only after the results of evaluation have been submitted to and resolved upon by the Board of Directors. The Company shall not authorize any other person to make such decision. Where the independent directors have been installed, when loaning funds to others, the Company shall take into full consideration each independent director's opinions; the independent directors' opinions specifically expressing assent or dissent and their reasons for dissent shall be included in the minutes of the board meetings.The operating procedures of fund loaning and
review process are as follows: (1) When the Company handles the matters of fund loaning, the necessary financial information and guarantee shall be provided by the Borrower to the Finance Division of the Company in advance. (2) The Finance Division of the Company shall prepare a report specifically stating the borrower, reason, the necessity and reasonableness of loansto others, amount, term, interest rate, method of repayment, source of funds, collateral or other methods of guarantee and other necessary matters.
(1) (2)

121

(3) The procedures of fund loaning will be processed by the Finance Division only after receiving the guarantee notes of the same amount or other collateral as security for applying to the Company for fund loaning. Appraisal of the collateral shall be done carefully by the Finance Division. (4) The funds loaning between the Company and its subsidiaries shall be submitted to the Board of Directors for approval in accordance with this Article and the chairman of the Board of Directors may be authorized to loan the funds in installments or revolving within a certain amount resolved by the Board of Directors and within one year with respect to the same borrowers to whom the funds are loaned. The authorized amount of the funds loaned to a single enterprise shall not exceed ten percent of the net worth of the Company shown in the Company's latest financial report. (5) (Hereafter Omitted)	Division of the Company. Fund loaning shall be handled by the Finance Division after such report has been submitted tothe President andthe Chairman of the board of directors for their review and to the board of directors for approval. (3) The procedures of fund loaning will be processed by the Finance Division only after receiving the guarantee notes of the same amount or other collateral as security for applying to the Company for fund loaning. Appraisal of the collateral shall be done carefully by the Finance Division. (4) The funds loaning between the Company and its subsidiaries shall be submitted to the Board of Directors for approval in accordance with this Article and the chairman of the Board of Directors may be authorized to loan the funds in installments or revolving within a certain amount resolved by the Board of Directors and within one year with respect to the same borrews to whom the funds are loaned. The authorized amount of the funds loaned to a single enterprise shall not exceed ten percent of the net worth of the Company shown in the Company's latest financial report. (5) (Hereafter Omitted)	Division of the Company. Fund loaning shall be handled by the Finance Division after such report has been submitted tothe President andthe Chairman of the board of directors for their review and to the board of directors for approval. (3) The procedures of fund loaning will be processed by the Finance Division only after receiving the guarantee notes of the same amount or other collateral as security for applying to the Company for fund loaning. Appraisal of the collateral shall be done carefully by the Finance Division. (4) The funds loaning between the Company and its subsidiaries shall be submitted to the Board of Directors for approval in accordance with this Article and the chairman of the Board of Directors may be authorized to loan the funds in installments or revolving within a certain amount resolved by the Board of Directors and within one year with respect to the same borrews to whom the funds are loaned. The authorized amount of the funds loaned to a single enterprise shall not exceed ten percent of the net worth of the Company shown in the Company's latest financial report. (5) (Hereafter Omitted)
Article 4: The Term of Loan The term of loan shall not exceed one year.	Article 4: The Term of Loan The term of loan shall not exceed one year.~~If the tern of loan needs to exceed~~ ~~th l f th bd f~~		The wording has been amended by reference to laws and regulations, and the term of loan is adjusted so that it shall not exceed one year for
		~~e ern o oan nees o excee~~ ~~th l f th bd f~~
	~~one year, e approva o e oar o~~ ~~dit iid f ti Th~~
	~~recors s requre or exenson. e~~

122

	~~t f l td f htt~~	proper risk management.
	~~erm o oans grane or sor-erm~~ ~~fii~~ ~~d~~ ~~hld~~ ~~t~~ ~~b~~
	~~nancng~~ ~~nees~~ ~~sou~~ ~~no~~ ~~e~~ ~~extended.~~
Article 6: The Follow-Up Control Measures and the Process of Overdue Loan (1) The Company shall prepare a memorandum book for its fund loaning activities and truthfully record the following information: the borrower, amount, date of approval by the board of directors, date of loan, and matters to be carefully evaluated under Article 3. (2) The Finance Division shall be responsible for following and checking the financial conditions, business and related credit conditions of the Borrower and the guarantor and shall also pay attention to whether there is any change to the value of the collateral. If there is any significant change of circumstances, the Finance Division shall immediately report to the Chairman of the board of directors and appropriate measures shall be taken in accordance with the instructions. (3) When making a repayment on or before the due date, the Borrower shall first calculate the interest payable together with the principle. The Finance Division shall provide a report confirming that all amount of loan has been repaid and is approved bythe Chairman of the	Article 6: The Follow-Up Control Measures and the Process of Overdue Loan (1) The Company shall prepare a memorandum book for its fund loaning activities and truthfully record the following information: the borrower, amount, date of approval by the board of directors, date of loan, and matters to be carefully evaluated under Article 3. (2) The Finance Division shall be responsible for following and checking the financial conditions, business and related credit conditions of the Borrower and the guarantor and shall also pay attention to whether there is any change to the value of the collateral. If there is any significant change of circumstances, the Finance Division shall immediately report to~~the President and t~~he Chairman of the board of directors and appropriate measures shall be taken in accordance with the instructions. (3) When making a repayment on or before the due date, the Borrower shall first calculate the interest payable together with the principle. The Finance Division shall provide a report confirming that all amount of loan has been repaid and is approved by~~the~~	1. Certain words in Paragraphs (1) to (4) have been amended by reference to laws and regulations. 2. The approver in Paragraphs (2) and (3) has been changed in accordance with power and liability of each business in the organization. 3. The wording is revised by reference to the Regulations Governing Loaning of Funds and Endorsements/ Guarantees by Public Companies.

123

board of directors before return of collateral or guarantee to the Borrower. (4) The Borrower shall immediately repay all amount of interest and principle when due; otherwise, the Company may dispose the collateral and/or has a right of recovery to the guarantor.	(4)	~~President and th~~e Chairman of the board of directors before return of collateral or guarantee to the Borrower. The Borrower shall immediately repay all amount of interest and principle when due; otherwise, the Company may dispose the collateral and/or has a right of recovery to the guarantor.
Article 7: Internal Audit The Company's internal auditors shall audit the operating procedures for loaning funds to others and the implementation thereof no less frequently than quarterly and prepare written records accordingly. The Company's internal auditors shall promptly notify the independent directors andAudit Committee in writing of any material violation found	Article 7: Internal Audit The Company's internal auditors shall audit the operating procedures for loaning funds to others and the implementation thereof no less frequently than quarterly and prepare written records accordingly. The Company's internal auditors shall promptly notify the Audit Committee in writing of any material violation found		To strengthen corporate governance, independent directors have been added in this article in response to the amendment to the law.
Article 8: Procedure for announcement and report (1) The Company shall announce and report the loan balances of the Company and its subsidiaries for the previous month by the tenth day of each month, or conduct the announcement and report in accordance with relevant regulations promulgated by the competent authority. (2) If the loan balance reaches any of the following thresholds, the Company shall announce and report within two days from the date of occurrence. The date of occurrence referred to above means the date of execution of the	Article 8: Procedure for announcement and report (1) The Company shall announce and report the loan balances of the Company and its subsidiaries for the previous month by the tenth day of each month, or conduct the announcement and report in accordance with relevant regulations promulgated by the competent authority. (2) If the loan balance reaches any of the following thresholds, the Company shall announce and report within two days from the date of occurrence. The date of occurrence referred to above means the date of execution of		In view that loaning of funds is not a transaction in nature, certain wording in Paragraph (2) has been amended to comply with the amendment to the law.

124

contract, date of payment, date of board resolutions, or other dates that may confirmthe party to which the money is lent and loan amount,whichever date is earlier. (Hereafter Omitted)	the contract~~for the transaction,~~ date of payment, date of board resolutions, or other dates that may confirm thecounterparty and monetary value of the transaction,whichever date is earlier. (Hereafter Omitted)
Article 9: Penalty for Violation of These Procedures by Managers or Personnel in Charge (1) The responsible person of the Company who has violated Paragraph 1 of Article 3 of the Regulations Governing Loaning of Funds and Endorsements/Guarantees by Public Companies shall be liable, jointly and severally with the Borrower, for the repayment of the loan at issue in accordance with Paragraph 6 of the same article of the same regulations, and shall indemnify the Company for any damages suffered by the Company resulted therefrom. (2) In order to prevent managers or personnel in charge from taking advantage of their offices to engage in illegal fund loaning, when managers or personnel in charge violate theseOperating Proceduresor the related laws and regulations, the Human Resource Department shall provide a proposal of penaltyto be approved by the head-in-chargeaccording to the severity of violation based on the evidence provided by the division in charge or audit division. Penalty imposed on managers shall be submitted tothe Compensation	Article 9: Penalty for Violation of These Procedures by Managers or Personnel in Charge In order to prevent managers or personnel in charge from taking advantage of their offices to engage in illegal fund loaning, when managers or personnel in charge violate these Proceduresor the related laws and regulations, the Human Resource Department shall provide a proposal of penalty according to the severity of violation based on the evidence provided by the division in charge or audit division.Penalty imposed on personnel in charge shall be assented	1. Paragraph (1) was newly added to conform to the amendment to the law. It is specified that in the event of any violation of these operating procedures, the Company’s responsible person shall be jointly and severally liable for the repayment of the loan and indemnification for any damages caused. 2. Relevant words have been amended according to adjustments to the power and liability of each business in the organization.
	by the President and approved by the
	Chairman of the board of directors.

125

Committee andthe board of directors for approval. In the event of unrecoverable loss incurred froman individual'sviolation of theseoperating proceduresor the related laws and regulations with intent or negligence, suspension may be imposed on personnel in charge after being approved by the president and suspension may be imposed on managers after being approved bythe head-in- charge. The aforementioned managers shall mean the ones set up in accordance with the rulingissued by the Securities and Futures Commission dated March 27, 2003 (Ref. No.: Tai-Tsai-Jen-(3)- 0920001301) and the aforementioned personnel in charge shall mean personnel involved and relevant supervisors in charge of review and approval of execution.	Penalty imposed on managers shall be assented by the Chairman of the board
	of directorsand submitted to the board of directors for approval. In the event of unrecoverable loss incurred from violation of these proceduresor the related laws and regulations with intent or negligence, suspension may be imposed on personnel in charge after being
	approved by the President and
	suspension may be imposed on
	managers after being approved by the
	Chairman of the board of directors. The aforementioned managers shall mean the ones set up in accordance with the ruling (Ref. No.: Tai-Tsai-Jen- (3)-0920001301) and the aforementioned personnel in charge shall mean personnel involved and relevant supervisors in charge of review and approval of execution.
IV. THE EFFECTIVENESS AND AMENDMENT These Procedures shall be approved by at least one half of all the audit committee members and then submitted to the Board of Directors for resolution. After approved by the Board of Directors, these procedures shall be submitted to the shareholders' meeting for approval; where any director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the dissenting opinion to the audit committee and for discussion by the shareholders' meeting. The same shall apply to any amendment to the Procedures. When the Operating Procedures of Fund Loaning are submitted by the Company to the Board of Directors for discussion in accordance with relevant rules,the Board	IV. THE EFFECTIVENESS AND AMENDMENT These Procedures shall be approved by at least one half of all the audit committee members and then submitted to the Board of Directors for resolution. After approved by the Board of Directors, these procedures shall be submitted to the shareholders' meeting for approval; where any director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the dissenting opinion to the audit committee and for discussion by the shareholders' meeting. The same shall apply to any amendment to the Procedures. When the Operating Procedures of Fund Loaning are submitted bythe Companyto the	The language of this article is revised by reference to Article 14-3 of the Securities and Exchanges Act to reflect amendments to the law.

126

of Directors shall take into full consideration each independent director's opinion;any dissent from or qualification by the independent directors (if any) shall be included in the minutes of the Board of Directors' meetings. If approval of the majority of all audit committee members as required in the preceding paragraph is not obtained, these Procedures or amendments thereto may be implemented if approved by more than two-thirds of all directors, and the resolution of the audit committee shall be recorded in the meeting minutes of the Board of Directors. The terms "all audit committee members" in paragraph 3 and "all directors" in this paragraph shall be counted as the actual number of persons currently holding those positions.	Board of Directors for discussion in accordance with relevant rules, the Board of Directors shall take into full consideration each independent director's opinion; independent directors' opinions specifically	Board of Directors for discussion in accordance with relevant rules, the Board of Directors shall take into full consideration each independent director's opinion; independent directors' opinions specifically
		specifically
	expressing assent or dissent and their
	reasons for dissent shall be included in
	the minutes of the board meetings. If approval of the majority of all audit committee members as required in the preceding paragraph is not obtained, these Procedures or amendments thereto may be implemented if approved by more than two-thirds of all directors, and the resolution of the audit committee shall be recorded in the meeting minutes of the Board of Directors. The terms "all audit committee members" in paragraph 3 and "all directors" in this paragraph shall be counted as the actual number of persons currently holding those positions.

127

Nuvoton Technology Corporation

Operating Procedures for Loaning of Funds (After Amendment)

I. PURPOSE

To soundly manage the Company's fund loaning and to reduce the risk in management, the Company enacts these Procedures.

II. OBJECTIVE

These Procedures were enacted in accordance with the Company Act and other relevant laws and regulations to effectively manage matters concerning loans to others in line with the principles of steady and solid management of the Company.

III. CONTENTS

Article 1: Parties Eligible for Loans from the Company

(1) The Company shall not grant loans to any shareholder or anyone except for the following:
Companies which have business dealings with the Company, to the extent that the loan is for their working capital needs only; and
1. Companies having short term financing needs in which the Company holds, whether directly or indirectly, fifty percent or more of the voting shares.
(2) The restrictions set out in Paragraphs 1 and 2 of Article 2 and Article 4 hereof may not apply to the intercompany loans between foreign companies in which the Company holds, whether directly or indirectly, 100% of the voting shares, or the intercompany loans granted by foreign companies in which the Company holds, whether directly or indirectly, 100% of the voting shares, to the Company; provided, however, that the Company shall prescribe the aggregate maximum loan amount that the Company can provide and the maximum loan amount permitted to be lent to a single borrower and specify the term of loan in these Procedures according to the Regulations Governing Loans and Endorsements /Guarantees by Public Companies promulgated by the securities authority.

Article 2: Maximum amount of loans granted to other parties

(1) Aggregate maximum loan amount
The aggregate maximum loan amount granted to others may not exceed twenty percent of the net worth of the Company shown in its latest financial report.
(2) The maximum amount of loans for each borrower

The aggregate amount of loans granted to the same Borrower having business dealings

128

with the Company and short-term financing needs shall not exceed the Borrower's net worth shown in the Borrower's latest financial report or ten percent of the net worth of the Company shown in the Company's latest financial report, whichever is lower. Moreover, in the event of aforementioned loans for business dealings with the Company, the amount of each individual loan offered by the Company may not exceed the total business transaction amount within the latest year between the Borrower and the Company. The business transaction amount shall mean the amount of purchase or sale between the Company and Borrower, whichever is higher.

(3) "Financing amount" used in this article means the cumulative balance of the Company's short-term financing.
(4) Where changes in circumstances in respect of the Company cause the entity to which the Company gives loans to cease to be an eligible entity under the Operating Procedures or the loan balance exceeds the maximum loan amount, the Company shall draft an improvement plan, submit the same to the independent directors and the Audit Committee and complete the improvement on schedule.

Article 3: Operating Procedures of Fund Loaning and Review Process

Before loaning funds to others, the Company shall carefully evaluate whether it is in compliance with the "Regulations Governing Loaning of Funds and Providing Endorsements and/or Guarantees by Public Companies" promulgated by the securities authority and these Operating Procedures. The Company may make loans to others only after the results of evaluation have been submitted to and resolved upon by the Board of Directors. The Company shall not authorize any other person to make such decision. Where the independent directors have been installed, when loaning funds to others, the Company shall take into full consideration each independent director's opinions; the independent directors' opinions specifically expressing assent or dissent and their reasons for dissent shall be included in the minutes of the board meetings. The operating procedures of fund loaning and review process are as follows:

(1) When the Company handles the matters of fund loaning, the necessary financial information and guarantee shall be provided by the Borrower to the Finance Department of the Company in advance.
(2) The Finance Department of the Company shall prepare a report specifically stating the borrower, reason, the necessity and reasonableness of loans to others, amount, term, interest rate, method of repayment, source of funds, collateral or other methods of guarantee and other necessary matters.
(3) The procedures of fund loaning will be processed by the Finance Department only after receiving the guarantee notes of the same amount or other collateral as security for applying to the Company for fund loaning. Appraisal of the collateral shall be done

129

carefully by the Finance Division.

(4) The funds loaning between the Company and its subsidiaries shall be submitted to the Board of Directors for approval in accordance with this Article and the Chairman of the Board of Directors may be authorized to loan the funds in installments or revolving within a certain amount resolved by the Board of Directors and within one year with respect to the same persons to whom the funds are loaned. The authorized amount of the funds loaned to a single enterprise shall not exceed ten percent of the net worth of the Company shown in the Company's latest financial report.
(5) During the period that the Company receives the endorsement/guarantee provided by, or the funds lent by, its parent company. Neither the Company nor any of its Subsidiaries may engage in lending of funds to others.

Material fund loaning by the Company shall be approved by at least one half of all audit committee members and submitted to the Board of Directors for resolution. If approval of the majority of all audit committee members is not obtained, such fund loaning may be implemented if approved by more than two-thirds of all directors, and the resolution of the audit committee shall be recorded in the meeting minutes of the Board of Directors. The terms "all audit committee members" and "all directors" in this Paragraph shall be counted as the actual number of persons currently holding those positions.

Article 4: The Term of Loan

The term of loan shall not exceed one year.

Article 5: The Method of Interest Calculation for Loaning of Funds

The method of interest calculation for fund loaning shall be decided with reference to the interest rate of correspondent financial institutions of the Company and may be adjusted according to the cost of funds. The interest calculation and receipt shall be made once a month except that under special circumstances, adjustment may be made according to the actual need after being approved by the Board of Directors.

Article 6: The Follow-Up Control Measures and the Process of Overdue Loan

(1) The Company shall prepare a memorandum book for its fund loaning activities and truthfully record the following information: the borrower, amount, date of approval by the Board of Directors, date of loan, and matters to be carefully evaluated under Article 3 hereof.
(2) The Finance Department shall be responsible for following and checking the financial conditions, business and related credit conditions of the Borrower and the guarantor and shall also pay attention to whether there is any change to the value of the collateral. If there is any significant change of circumstances, the Finance Division shall

130

immediately report to the Chairman of the Board of Directors and appropriate measures shall be taken in accordance with the instructions.

(3) When making a repayment on or before the due date, the Borrower shall first calculate the interest payable together with the principle. The Finance Department shall provide a report confirming that all amount of loan has been repaid and is approved by the Chairman of the Board of Directors before return of collateral or guarantee to the Borrower.
(4) The Borrower shall immediately repay all amount of interest and principle when due; otherwise, the Company may dispose the collateral and/or has a right of recovery to the guarantor.

Article 7: Internal Audit

The Company's internal auditors shall audit the operating procedures for loaning funds to others and the implementation thereof no less frequently than quarterly and prepare written records accordingly. The Company's internal auditors shall promptly notify the independent directors and the Audit Committee in writing of any material violation found.

Article 8: Procedure for announcement and report

(1) The Company shall announce and report the loan balances of the Company and its subsidiaries for the previous month by the tenth day of each month, or conduct the announcement and report in accordance with relevant regulations promulgated by the competent authority.
(2) If the loan balance reaches any of the following thresholds, the Company shall announce and report within two days from the date of occurrence. The date of occurrence referred to above means the date of execution of the contract, date of payment, date of board resolutions, or other dates that may confirm the party to which the money is lent and loan amount, whichever date is earlier.
(i) The balances of the loans granted by the Company and its subsidiaries reaches twenty percent or more of the net worth of the Company as stated in its latest financial statement.
(ii) The balances of the loans granted by the Company and its subsidiaries made to a single entity reaches ten percent or more of the net worth of the Company as stated in its latest financial statement.
(iii) The amount of new loans granted by the Company or its subsidiaries reaches NT$10 million and reaches two percent of the net worth of the Company as stated in its latest financial statement.
(3) Where any subsidiary of the Company is not a domestic public offering company, the Company shall make the required announcement and report on behalf of such

131

subsidiary if the situation prescribed in the preceding Item (iii) occurs.

(4) The Company shall evaluate the status of loans and make sufficient allowances for bad debts and shall properly disclose relevant information in its financial reports and provide the certified public accountants with the relevant information to conduct necessary audit procedures.

Article 9: Subsidiary and Parent Company, Net Worth

(1) "Net worth" as set forth herein means parent company owner's equity on the balance sheet under the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
(2) "Subsidiary" and "parent company" as set forth herein shall be determined per the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Article 10: Penalty

(1) The responsible person of the Company who has violated Paragraph 1 of Article 3 of the Regulations Governing Loaning of Funds and Endorsements/Guarantees by Public Companies shall be liable, jointly and severally with the Borrower, for the repayment of the loan at issue in accordance with Paragraph 6 of the same article of the same regulations, and shall indemnify the Company for any damages suffered by the Company resulted therefrom.
(2) In order to prevent managers or personnel in charge from taking advantage of their offices to engage in illegal fund loaning, when managers or personnel in charge violate these Operating Procedures or the related laws and regulations, the Human Resource Department shall provide a proposal of penalty to be approved by the head-in-charge according to the severity of violation based on the evidence provided by the division in charge or audit division. Penalty imposed on managers shall be submitted to the Compensation Committee and the board of directors for approval.

In the event of unrecoverable loss incurred from an individual's violation of these operating procedures or the related laws and regulations with intent or negligence, suspension may be imposed on personnel in charge after being approved by the president and suspension may be imposed on managers after being approved by the head-in-charge.

132

Article 11: Control procedure to subsidiaries in loaning funds to other parties

The Company shall require all of its subsidiaries to formulate their own "Procedures for Loaning Funds to Other Parties" in accordance with the "Regulations Governing Loaning Funds and Providing Endorsement and Guarantee by Public Offering Companies" promulgated by the competent authorities and the "Procedures for Loaning Funds to Other Parties" of the Company. Any loan made by the subsidiaries shall comply with their own "Procedures for Loaning Funds to Other Parties", and the internal audit department of the Company shall be responsible for reviewing all self-assessment reports prepared by all subsidiaries.

IV. THE EFFECTIVENESS AND AMENDMENT

These Procedures shall be approved by at least one half of all the audit committee members and then submitted to the Board of Directors for resolution. After approved by the Board of Directors, these procedures shall be submitted to the shareholders' meeting for approval; where any director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the dissenting opinion to the audit committee and for discussion by the shareholders' meeting. The same shall apply to any amendment to the Procedures. When the Operating Procedures of Fund Loaning are submitted by the Company to the Board of Directors for discussion in accordance with relevant rules, the Board of Directors shall take into full consideration each independent director's opinion; any dissent from or qualification by the independent directors (if any) shall be included in the minutes of the Board of Directors' meetings.

If approval of the majority of all audit committee members as required in the preceding paragraph is not obtained, these Procedures or amendments thereto may be implemented if approved by more than two-thirds of all directors, and the resolution of the audit committee shall be recorded in the meeting minutes of the Board of Directors. The terms "all audit committee members" in this Paragraph and "all directors" in this paragraph shall be counted as the actual number of persons currently holding those positions.

V. Reference Documents

Regulations Governing Loaning of Funds and marking of Endorsements/Guarantees by Public Companies.

133

NUVOTON TECHNOLOGY CORPORATION Comparison Table of Amendments to Rules Governing the Conduct of Shareholders Meeting

Articles After Amendment	Article Before Amendment	Note
Article 3 (Omitted) The matters specified in Paragraph 5 of Article 172 of the Company Act,or Article 26-1 or Article 43-6 of the Securities and Exchange Act, or Article 56-1 or Article 60- 2 of the Regulations Governing Offering and Issuance of Securities by Issuers shall be listed among the reasonsand explained in the conventionnoticeof the meeting, and may not be proposed as extemporary motions.The essential contents of the matters specified in Paragraph 5 of Article 172 of the Company Act may be posted on the website designated by the competent authority in charge of securities affairs, and such website shall be indicated in the above notice. (Hereafter Omitted)	Article 3 (Omitted) ~~Th lti dih f dit~~	The wording of this article is revised to conform to the amendments to Paragraph 5 of Article 172 of the Company Act.
	~~e eecon or scarge o recors,~~ ~~dt t th C' Atil f~~
	~~amenmen o e ompanys rces o~~ ~~Iti dilti iff~~
	~~ncorporaon, ssouon, merger, or spn-o~~ ~~f th C th tt ifid i~~
	~~o e ompany, or e maers spece n~~ ~~Ph 1 f Atil 185 f th C At~~
	~~aragrap o rce o e ompany c,~~ ~~or A~~rticle 26-1 or Article 43-6 of the Securities and Exchange Act, or Article 56-1 or Article 60-2 of the Regulations Governing Offering and Issuance of Securities by Issuers shall be listed among the reasons for the meeting, and may not be proposed as extemporary motions. (Hereafter Omitted)
Article 21 These Rules were enacted on June 10, 2009. The first amendment was made on June 5, 2012. The second amendment was made on June 10, 2015. The third amendment was made on June 15, 2016. The fourth amendment was made on June 24, 2019.	Article 16 These Rules were enacted on June 10, 2009. The first amendment was made on June 5, 2012. The second amendment was made on June 10, 2015. The third amendment was made on June 15, 2016.	The date of this amendment is added.

134

NUVOTON TECHNOLOGY CORPORATION Comparison Table of Amendments to the Procedures for Election of Directors

Articles After Amendment	Article Before Amendment	Note
Article 2 The candidate nomination and election of directors shall be conducted in accordance with the Company Act, Securities and Exchange Act and other relevant laws and regulations. The professional qualification, shareholding, restrictions on concurrent serving in other companies and other matters to be complied with by independent directors shall be processed in accordance with relevant laws and regulations.	Article 2 ~~Ul thi idd b l d~~	The wording of this article is revised to conform to the amendments to Article 192-1 of the Company Act.
	~~ness oerwse prove y aws an~~ ~~lti b th C' til f~~
	~~reguaons or y e ompanys arces o~~ ~~incorporation, e~~lections of directors shall be conducted in accordance with these Procedures.
Article 6 Elections of directors at the Company shall adopt the candidate nomination system and procedures set out in Article 192-1 of the Company Act and cumulative voting with single name registered on the ballot. Each share shall have voting rights in number equal to the directors to be elected, and may be cast for a single candidate orallocatedamong multiple candidates shown on the list of director candidates.	Article 6 Elections of directors at the Company shall adopt the candidate nomination system and procedures set out in Article 192-1 of the Company Act and cumulative voting with single name registered on the ballot.~~This~~ ~~C hll i th lifiti~~	The wording of this article is revised to conform to the amendments to Articles 192-1 and 198 of the Company Act.
	~~ompany sa revew e quacaons,~~ ~~dti k i bkd d~~
	~~eucaon, wor experence, acgroun, an~~ ~~hth th it f th tt t fth~~
	~~weer ere exss any o e maers se or~~ ~~i Atil 30 f th C At ith t~~
	~~n rce o e ompany c w respec~~ ~~t didt f dit d t~~
	~~o canaes o recors an may no~~ ~~bitil dd it f dtti~~
	~~arrary a requremens or ocumenaon~~ ~~of other qualifications.~~ ~~The Company shall~~ ~~fth id th lt f th i t~~
	~~urer prove e resus o e revew o~~ ~~hhld f thi f tht~~
	~~sareoers or er reerence, so a~~ ~~qualified directors will be elected.~~Each share shall have voting rights in number equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates shown on the list of director candidates.
Article 16	Article 16	Date of this

135

Articles After Amendment	Article Before Amendment	Note
These Procedures were enacted on June 10, 2009. The first amendment was made on June 14, 2013. The second amendment was made on June 10, 2015. The third amendment was made on June 15, 2016. The fourth amendment was made on June 24, 2019.	These Procedures were enacted on June 10, 2009. The first amendment was made on June 14, 2013. The second amendment was made on June 10, 2015. The third amendment was made on June 15, 2016.	amendment was added.

136

List of Directors (including Independent Directors) Candidates

Category	Name	Education	Work Experience	Current Job	Shareholding (Unit`：` Share)	Name of government or legal person represented
Director Candidate	Arthur Yu-Cheng Chiao	Master in Electrical Engineering and Researcher of Management College of Washington University	Chairman of Walsin Lihwa Corporation Chairman and Compensation Committee member of Capella Microsystems	Chairman and CEO of Winbond Electronics Corporation Director of Walsin Lihwa Corporation Director of Walsin Technology Corporation Director of United Industrial Gases Co., Ltd. Independent Director and Compensation Committee Convener and Audit Committee member of Taiwan Cement Corp. Independent Director and Compensation Committee Member and Audit Committee member of Synnex Technology International Corporation Supervisor of MiTAC Holdings Corporation	0	N/A
Director Candidate	Pei-Ming Chen	MS of E.E., University of Detroit, USA	Assistant Vice President of Winbond Electronics	Vice President of Winbond Electronics Corp. Chairman of Mobile Magic Design Corp. Director of Winbond Electronics (Suzhou)	126,620,087	Winbond Electronics Corp.
Director Candidate	Yung Chin	Master of Applied Mathematics, University of Washington;	Chief Auditor of Walsin Lihwa Corp. Vice President of Winbond Electronics Corp.	Director and Chief Administrative Officer of Winbond Electronics Corporation Chairman of Hwa Bao Botanic Conservation Corp.	253,185	Chin Xin Investment Corp.
Director Candidate	Ken- Shew Lu	PhD from Texas Tech University	Senior Vice President of Memory Products, Senior Vice President of Global Mixed and Analog, Signal Logical Products of Texas Instruments Incorporated	Chairman, CEO and Director of Diodes Incorporated Director of Lorenz Director of Lite-On Technology Corporation	0	N/A

137

Category	Name	Education	Work Experience	Current Job	Shareholding (Unit`：` Share)	Name of government or legal person represented
			Chairman of LED Engin, Inc
Director Candidate	Chi-Lin Wea	Master of Management from Imperial College London, United Kingdom, PhD in Economics from University of Paris	Secretary general of Executive Yuan, Chairman of Land Bank of Taiwan, Director of National Taiwan University College of Management	Chairman of Waterland Financial Holding Co., Ltd. Chairman of International Bills Finance Corporation Director of ELAN MICROELECTRONICS CORP. Director of AcBel Polytech Inc. Independent Director of Inventec Besta Co., Ltd., Independent Director of Sinbon Electronics Co., Ltd., Independent Director of Formosa Plastics Corporation.	0	N/A
Independent Director Candidate	Allen Hsu	MBA, National Chengchi University; Refresher course, of Walton Business School	Chairman of Altek Corporation, Chairman of TAIWAN MASK CORP., Chairman of Myson Century, Inc., Chairman of Chingis Technology Corporation, Independent Director of ANZ Bank (Taiwan) Limited	Chairman of Hestia Power Inc. Chairman of AccelStor Co., Ltd. Chairman of Yizhong Technology Inc. Chairman of You Yuan Investment Ltd. Chairman of Fortune Star Investment Ltd. Director of Innodisk Corporation, Director of Acme Electronics Corporation Director of Anderson Industrial Corp. Director of Pilot Electronics Corporation Independent Director, Compensation Committee convener and Audit Committee convener of Winbond Electronics Corporation	0	N/A
Independent Director Candidate	David Shu- Chyuan Tu	Master of Computer Engineering from California State University	President of Planning Department of Synnex Technology International Corp.	Vice President Group Business Development & Strategy of Synnex Technology International Corp. Director of BestCom Infotech Corp	0	N/A
Independent Director	Royce Yu-Chun	Department of Industrial Design Rhode Island	Director of Panasonic Corporation	Chairman and President of Ipevo Inc. Chairmanof Xrange Co.,Ltd.	0	N/A

138

Category	Name	Education	Work Experience	Current Job	Shareholding (Unit`：` Share)	Name of government or legal person represented
Candidate	Hong	School of Design, Graphic Design at Art Center College of Design	Creative Director of PCHome Store	Chairman of XING Mobility Inc Chairman of Panasonic Taiwan Co., Ltd. Director of Long Jun Investment Co., Ltd. Supervisor of Yuchi Venture Investment Co., Ltd. Supervisor of Panasonic Electronics Products Co. Ltd.
Independent Director Candidate	Jerry Hsu	Waseda Business School, Japan, MBA, Peking University, China	Director of Cal- Comp Biotech, Director of Kinpo Electronics, Inc. Director of PC Home Online	Chairman and Executive VP of AcBel Polytech Director of Kinpo Electronics, Inc., Director of PCHome Store, Director of Eslite spectrum Corp. Independent Director of Winbond Electronics Corporation Independent Director of SIRTEC INTERNATIONAL Co.,Ltd.	0	N/A

139

Explanations of Involvement of the Director in Acts for Himself or Others Which Fall into the Scope of the Company's Business

Mr. Arthur Yu-Cheng Chiao `：`

Names of other companies
	Title	Business items same or similar to the Company’s
Where he served

Winbond Electronics Corporation	Chairman and CEO	`CC01080`Electronic Parts and Components Manufacturing `CC01110`Computers and Computing Peripheral Equipment Manufacturing `CC01120`Data Storage Media Manufacturing and Duplicating `F401010`International Trade `I301010`Software Design Services `I501010`Product Designing
Walsin Lihwa Corporation	Director	`ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
WALSIN TECHNOLOGY CORP	Director	`CC01080`Electronic Parts and Components Manufacturing `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
United Industrial Gases Co., Ltd	Director	`F401010`International Trade
Chin Cheng Construction Corp.	Director	`ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
Winbond Electronics Corporation America	Director	Design, sales and service of semiconductor parts and components
Taiwan Cement Corp.	Independent Director	`F401010`International Trade `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
Synnex Technology International Corp.	Independent Director	`CC01110`Computers and Computing Peripheral Equipment Manufacturing `F401010`International Trade `I301010`Software Design Services `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.

140

Mr. Pei-Ming Chen ：

Names of other companies
	Title	Business items same or similar to the Company’s
Where he served

Mobile Magic Design Corporation	Chairman	`CC01080`Electronic Parts and Components Manufacturing
Winbond Electronics (Suzhou) Ltd.	Director	Design, research, development, testing and sales of integrated circuit and its related equipment, and after- sale service
Winbond Electronics Corporation America	Director	Design, sales and service of semiconductor parts and components
Winbond Electronics Corporation	Vice President	`CC01080`Electronic Parts and Components Manufacturing `CC01110`Computers and Computing Peripheral Equipment Manufacturing `CC01120`Data Storage Media Manufacturing and Duplicating `F401010`International Trade `I301010`Software Design Services `I501010`Product Designing
Winbond Electronics Corporation`：`
Names of other companies
	Title	Business items same or similar to the Company’s
Where he served

Walton Advanced Engineering Inc.	Director	`CC01080`Electronic Parts and Components Manufacturing `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
Winbond Electronics (H.K.) Ltd.	Director	Sales and service of semiconductor parts and components
Winbond Technology Ltd.	Director	Design and service of semiconductor components
Mobile Magic Design Corporation	Director	`CC01080`Electronic Parts and Components Manufacturing
Techdesign Corporation	Director	`F401010`International Trade `I301010`Software Design Services `I501010`Product Designing `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.

141

Ms. Yung Chin `：`

Names of other companies
	Title	Business items same or similar to the Company’s
Where he served

Winbond Electronics Corporation	Director	`CC01080`Electronic Parts and Components Manufacturing `CC01110`Computers and Computing Peripheral Equipment Manufacturing `CC01120`Data Storage Media Manufacturing and Duplicating `F401010`International Trade `I301010`Software Design Services `I501010`Product Designing
Winbond Electronics (H.K.) Ltd.	Chairman	Sales and service of semiconductor parts and components
Hwa Bao Botanic Conservation Corp.	Chairman	`F401010`International Trade `I501010`Product Designing `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
Winbond Electronics Corporation America	Director	Design, sales and service of semiconductor parts and components

Mr. Ken-Shew Lu `：`

Names of other companies
	Title	Business items same or similar to the Company’s
Where he served

Diodes Incorporated	Chairman, CEO and Director	Sales and service of semiconductor parts and components
Lorenz	Director	The company is mainly engaged in semiconductor software design
LITE-ON TECHNOLOGY CORP.	Director	`CC01080`Electronic Parts and Components Manufacturing `CC01110`Computers and Computing Peripheral Equipment Manufacturing `CC01120`Data Storage Media Manufacturing and Duplicating F401010 International Trade I301010 Software Design Services I501010 Product Designing `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.

Mr. Chi-Lin Wea ：

142

Names of other companies
	Title	Business items same or similar to the Company’s
Where he served

ELAN MICROELECTRONICS CORP.	Director	`CC01080`Electronic Parts and Components Manufacturing `F401010`International Trade `CC01110`Computers and Computing Peripheral Equipment Manufacturing
AcBel Polytech Inc.	Director	`CC01080`Electronic Parts and Components Manufacturing `CC01110`Computers and Computing Peripheral Equipment Manufacturing `F401010`International Trade `I301010`Software Design Services `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
INVENTEC BESTA CO., LTD	Independent Director	`F401010`International Trade `CC01120`Data Storage Media Manufacturing and Duplicating `CC01080`Electronic Parts and Components Manufacturing `I301010`Software Design Services `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
SINBON ELECTRONICS CO.,LTD.	Independent Director	`CC01080`Electronic Parts and Components Manufacturing `CC01110`Computers and Computing Peripheral Equipment Manufacturing `I501010`Product Designing `F401010`International Trade `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
Formosa Plastics Corporation	Independent Director	`CC01080`Electronic Parts and Components Manufacturing `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.

Mr. Allen Hsu `：`

Names of other companies
	Title	Business items same or similar to the Company’s
Where he served

HESTIA POWER INC.	Chairman	`CC01080`Electronic Parts and Components Manufacturing

143

		`I301010`Software Design Services `I501010`Product Designing `F401010`International Trade `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
INNODISK CORPORATION	Director	`F401010`International Trade `I301010`Software Design Services `I501010`Product Designing `CC01080`Electronic Parts and Components Manufacturing `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
ACME ELECTRONICS CORPORATION	Director	`CC01080`Electronic Parts and Components Manufacturing `F401010`International Trade `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
PARPRO CORPORATION	Director	CC01080 Electronic Parts and Components Manufacturing `F401010`International Trade
Winbond Electronics Corporation	Independent Director	`CC01080`Electronic Parts and Components Manufacturing `CC01110`Computers and Computing Peripheral Equipment Manufacturing `CC01120`Data Storage Media Manufacturing and Duplicating `F401010`International Trade `I301010`Software Design Services `I501010`Product Designing

Mr. David Shu-Chyuan Tu `：`

Names of other companies
	Title	Business items same or similar to the Company’s
Where he served

Synnex Technology International Corp.	Vice President Group Business Development & Strategy	`CC01080`Electronic Parts and Components Manufacturing `F401010`International Trade `I301010`Software Design Services `CC01110`Computers and Computing Peripheral Equipment Manufacturing `CC01120`Data Storage Media Manufacturing and Duplicating `ZZ99999`All business items that are notprohibited

144

		or restricted by law, except those that are subject to special approval.
BestCom Infotech Corp.	Director	`CC01080`Electronic Parts and Components Manufacturing `F401010`International Trade `I301010`Software Design Services `CC01110`Computers and Computing Peripheral Equipment Manufacturing `CC01120`Data Storage Media Manufacturing and Duplicating `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.

Mr. Royce Yu-Chun Hong `：`

Names of other companies
	Title	Business items same or similar to the Company’s
Where he served

Ipevo Inc.	Chairman and General Manage	r `F401010`International Trade `I301010`Software Design Services `I501010`Product Designing `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
Xrange Co., Ltd.	Chairman	`I501010`Product Designing `F401010`International Trade `I301010`Software Design Services `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
XING Mobility Inc	Chairman	`F401010`International Trade `I501010`Product Designing `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
Panasonic Taiwan Co., Ltd.	Chairman	`CC01080`Electronic Parts and Components Manufacturing `CC01110`Computers and Computing Peripheral Equipment Manufacturing `I301010`Software Design Services `F401010`International Trade `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.

Mr. Jerry Hsu:

145

Names of other companies
	Title	Business items same or similar to the Company’s
Where he served

CAL-COMP BIOTECH CO., LTD.	Director	`F401010`International Trade `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
KINPO ELECTRONICS, INC.	Director	`CC01080`Electronic Parts and Components Manufacturing `CC01110`Computers and Computing Peripheral Equipment Manufacturing `F401010`International Trade `I301010`Software Design Services
Breeze Integrated Development Co., Ltd.	Director	`ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
PCHOME ONLINE INC.	Director	`F401010`International Trade `I301010`Software Design Services `I501010`Product Designing `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
CAL-COMP BIG DATA, INC.	Director	`CC01120`Data Storage Media Manufacturing and Duplicating `F401010`International Trade `I301010`Software Design Services `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
The Eslite Spectrum Corporation	Director	`F401010`International Trade `I301010`Information Software Service `I501010`Product Design
AcBel Polytech Inc.	Chairman and Executive VP	`CC01080`Electronic Parts and Components Manufacturing `CC01110`Computers and Computing Peripheral Equipment Manufacturing `F401010`International Trade `I301010`Software Design Services `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.
Kang Exhibition Electronics (Dongguan) Co., Ltd.	Director and General Manager	The company mainly engages in the processing, manufacturing and sale of power suppliers.
AcBel Polytech (Dongguan) Co., Ltd.	Director and General	The company mainly engages in the processing and manufacturing of power suppliers.

146

	Manager
AcBel Polytech (Wuhan) Co., Ltd.	Director and General Manager	The company mainly engages in the processing, manufacturing and sale of power suppliers.
AcBel (USA) Polytech Inc.	Director	The company mainly engages in providing the after- salemaintenance services.
AcBel Polytech (SAMOA) Investment Inc.	Director	The company mainly engages in general investments.
AcBel Polytech (Singapore) Pte Ltd.	Director	The company mainly engages in general investments.
AcBel Polytech (UK) Limited	Director	The company mainly engages in providing the after- salemaintenance services.
AcBel Polytech Japan Inc.	Director	The company mainly engages in marketing and services ofelectronic products.
Power Station Holdings Ltd	Director	The companymainlyengages ingeneral investments.
Winbond Electronics Corporation	Independent Director	`CC01080`Electronic Parts and Components Manufacturing `CC01110`Computers and Computing Peripheral Equipment Manufacturing `CC01120`Data Storage Media Manufacturing and Duplicating `F401010`International Trade `I301010`Software Design Services `I501010`Product Designing
SIRTEC INTERNATIONAL CO.,LTD	Independent Director	`CC01080`Electronic Parts and Components Manufacturing `CC01110`Computers and Computing Peripheral Equipment Manufacturing `F401010`International Trade `ZZ99999`All business items that are not prohibited or restricted by law, except those that are subject to special approval.

147

Appendix

148

(English Translation)

Nuvoton Technology Corporation Rules of Procedure for Shareholders Meeting (After Amendment)

The fourth amendment will be submitted to the annual general shareholders meeting on June 24, 2019 for approval

Article 1

These Rules were created for the specific purpose of establishing a good shareholders meeting governance system to strengthen the supervisory and management functions of the Company.

Article 2

Unless otherwise provided relevant laws, regulations and the Articles of Incorporation, all shareholders meetings of the Company shall be conducted in accordance with these Rules.

With the exceptions of Article 3 and Article 4 of these Rules, in which the term "shareholder" refers to shareholders themselves, "shareholder" as used in these Rules refers to shareholders themselves or a legally commissioned proxy attending on behalf of a shareholder.

Article 3

The shareholders meetings of the Company shall be convened by the Board of Directors unless otherwise provided by laws and regulations.

All shareholders shall be served with the convention notice of annual general shareholders meeting at least 30 days prior to each meeting, except for those shareholders each holding less than 1,000 registered shares who may be notified by means of an announcement on the Market Observation Post System at least 30 days prior to the meeting according to relevant laws and regulations. All shareholders shall be served with the convention notice of special shareholders meetings at least 15 days prior to the meeting, except for those shareholders each holding less than 1,000 registered shares who may be notified by means of an announcement on the Market Observation Post System at least 15 days prior to the meeting according to relevant laws and regulations.

Convention notices and announcements shall state the reasons for the meeting. The convention notice may, as an alternative, be given by means of electronic transmission, after obtaining the prior consent of shareholders.

The matters specified in Paragraph 5 of Article 172 of the Company Act, or Article 26-1 or Article 43-6 of the Securities and Exchange Act, or Article 56-1 or Article 60-2 of the Regulations Governing Offering and Issuance of Securities by Issuers shall be listed among the

149

reasons and explained in the convention notice of the meeting, and may not be proposed as extemporary motions. The essential contents of the matters specified in Paragraph 5 of Article 172 of the Company Act may be posted on the website designated by the competent authority in charge of securities affairs, and such website shall be indicated in the above notice.

The Company shall prepare the agenda handbook for shareholders meeting prior to the meeting in accordance with the relevant laws and regulations.

A shareholder holding 1 percent or more of the total number of issued shares may propose in writing to the Company a proposal for discussion at an annual shareholders meeting; provided that only one matter shall be allowed in each single proposal. In case a proposal submitted by shareholder(s) contains more than one matter, such proposal shall not be included in the agenda of the shareholders meeting. In addition, if any of the circumstances listed in Paragraph 4 of Article 172-1 of the Company Act occurs to the proposal submitted by any shareholder, the Board of Directors of the Company may ignore that proposal.

The Company shall announce the acceptance of shareholders' proposal, the place and the period for shareholders to submit proposals to be discussed at the shareholders meeting prior to the commencement of the close period for share transfer. The period for accepting such proposals shall not be less than 10 days.

Shareholder-submitted proposals are limited to 300 words, and no proposal containing more than 300 words will be included in the meeting agenda. The 300 words limit includes reasons and punctuation marks. Shareholders submitting proposals to be discussed at the shareholders meeting shall attend the shareholders meeting in person or by proxy, and participate in discussion of those proposals.

Prior to the date for issuance of notice of a shareholders meeting, the Company shall inform the shareholders who submitted proposals of the proposal screening results, and shall list in the meeting notice the proposals that conform to the provisions of this Article. At the shareholders meeting the Board of Directors shall explain the reasons for the exclusion of any shareholder proposals not included in the agenda.

Article 4

Prior to any shareholders meeting, a shareholder may appoint a proxy to attend the meeting by issuing a power of attorney in the proxy form provided by the Company stating the scope of authorization.

Each shareholder may issue one proxy form, and may only appoint one person to serve as a proxy. The power of attorney must be delivered to the Company at least five days prior to each shareholders meeting. If two or more written proxy forms are received from a shareholder, the first one received by the Company shall prevail; unless an explicit statement to revoke the previous written proxy is made in the proxy which comes later.

After the Company receives a proxy form, in the case that a shareholder who has issued a power

150

of attorney intends to attend the shareholders meeting in person or to exercise his/her/its voting power in writing or by way of electronic transmission, a written proxy rescission notice need be delivered to the Company two days prior to the date of the shareholders meeting; otherwise, the voting right exercised by the authorized proxy at the meeting shall prevail.

Article 5

Shareholders meetings shall be held at the Company's premises or at another place that is convenient for shareholders to attend and suitable for such meetings. Shareholders meetings shall not start earlier than 9:00 AM or later than 3:00 PM. About the place and time of shareholders meetings, if the Company has independent directors, the opinions of each attending independent directors shall be taken into full consideration.

Article 6

This Company shall prepare an attendance book for attending shareholders or proxies of shareholders ("Shareholders") to sign in, or Shareholders present may hand in an attendance sign-in card in lieu of signing on the attendance book. Each Shareholder attending the shareholders meeting in person (or proxy) shall wear an attendance pass.

The Company shall hand in the agenda handbook, annual report, attendance pass, speech note, ballot and other meeting documents to the Shareholders attending the shareholders meeting. If there is an election of directors, the Company shall hand out election ballot as well.

Shareholders shall attend shareholders meetings based on attendance passes, attendance signin cards, or other certificates of attendance. The Company may not arbitrarily add requirements for other documents beyond those showing eligibility to attend presented by Shareholders. Solicitors who have solicited proxies shall also bring identification documents for verification.

When a government or legal entity is a shareholder, said shareholder may be represented by more than one proxy at a shareholders meeting. A legal entity serving as proxy to attend a shareholders meeting may designate only one representative to attend such meeting.

Article 7

If a shareholders meeting is convened by the Board of Directors, the Chairman of the Board of Directors shall serve as chair for the meeting. If the Chairman of the Board of Directors is on leave or for any reason unable to perform his duties as Chairman, the Vice-Chairman shall act in place of the chairman. If the Company does not have a Vice-Chairman or the Vice-Chairman is also on leave or for any reason unable to perform the necessary duties, the Chairman of the Board of Directors shall appoint a managing director to serve on his behalf. If there are no managing directors, the Chairman of the Board of Directors shall appoint a director to serve on his behalf. Where the Chairman does not make such a designation, the managing directors or the directors shall select from among themselves one person to serve as chair for the meeting.

If a shareholders meeting is convened by a party other than the Board of Directors, the

151

convening party shall chair the meeting. When there are two or more individuals within such convening parties, the convening parties shall select a chair from among themselves in mutual agreement.

The Company may appoint lawyer(s) or certified public accountant(s) engaged by the Company, or relevant persons, to attend a shareholders meeting.

Article 8

The process of the shareholders meeting shall be audio recorded or video recorded in its entirety and these records shall be preserved for at least one year. If the Company allows shareholders to exercise their voting right in writing or by way of electronic transmission, the related written and media data shall also be preserved for at least one year. However, if a lawsuit has been filed by any shareholder pursuant to Article 189 of the Company Act, all records and data involved shall be kept by the Company until the legal proceedings of the lawsuit have been concluded.

Article 9

Attendance at the shareholders meeting shall be determined based on the number of shares. The number of shares represented by shareholders at the meeting shall be calculated as the number of shares represented by those present in person as indicated by the attendance book or attendance sing-in cards, plus the number of shares in which voting rights are exercised in writing or by way of electronic transmission.

The chairman shall announce the commencement of the shareholders meeting at the time scheduled for the meeting. But if the number of shares represented by the shareholders present at the meeting is less than one-half of all issued shares of the Company at the time scheduled for the meeting, the chairman may announce the postponement of the meeting. The shareholders meeting can only be postponed twice and the time of the postponement shall not be more than one hour in total.

If after two postponements as aforementioned, the number of shares represented by the shareholders present at the meeting is still less than one-half of all issued shares of the Company but the shareholders present at the meeting represent more than one-third of all issued shares, tentative resolutions may be made in accordance with Paragraph 1 of Article 175 of the Company Act. A notice of such tentative resolution shall be given to each of the shareholders, and the shareholders meeting shall be reconvened within one months.

If the number of the shares represented by the shareholders present at the shareholders meeting reaches one-half of all issued shares of the Company prior to the end of the meeting, the chairman may submit the aforementioned tentative resolutions to the shareholders meeting for approval in accordance with Article 174 of the Company Act.

Article 10

The agenda of the meeting shall be set by the Board of Directors if the meeting is convened by

152

the Board of Directors. The shareholders meeting shall be conducted according to the agenda, and unless otherwise provided by these Rules herein or laws and regulations, the agenda shall not be changed without resolution from the shareholders meeting.

The above provision in the preceding paragraph also applies to shareholders meetings convened by any parties that are not the Board of Directors but have the power to convene such meetings.

Unless otherwise resolved at the meeting, the chairman cannot announce adjournment of the meeting before all the items (including extemporaneous motions) listed in the agenda made according to the preceding two paragraphs are completed; after the meeting is adjourned, shareholders cannot designate another person as chairman and continue the meeting at the same or other place.

When the chairman sees the discussion over a motion, an amendment, or extemporaneous motion as having proceeded to the extent necessary to make a resolution, he may announce discontinuance of the discussion and submit the motion for resolution.

Article 11

When a shareholder present at the meeting wishes to speak, he/she shall fill in a speech note specifying the summary of his/her speech, the shareholder's account number (or the attendance pass number) and the account name of the shareholder. The chairman shall determine the sequence of shareholders' speeches.

If any shareholder present at the meeting submits a speech note but does not speak, no speech should be deemed to have been made by the shareholder. In case the contents of the speech of a shareholder are inconsistent with the contents of the speech note submitted by such shareholder, the contents of the actual speech shall prevail. Conduct for proxy’s speeches shall comply with the letter of the proxy forms, documents of public solicitation and advertisement. Unless otherwise provided by laws and regulations, the shareholders appointing a proxy to attend the shareholders meeting shall agree with any speeches and voting made by the proxy in the shareholders meeting.

The same shareholder may not speak more than twice on the same motion without the chairman's permission, and each speech time may not exceed 5 minutes. The chairman may halt the speech of any shareholder who violates the above provision or when the content of such speech is outside the scope of the ongoing discussion.

When a shareholder speaks at the meeting, unless otherwise permitted by the chairman and the speaking shareholder, no other shareholders shall interrupt the speech of the speaking shareholder; the chairman shall stop any violations.

When a legal-entity shareholder has appointed two or more representatives to attend the shareholders meeting, only one representative can speak for each motion.

After the speeches of the shareholders present at the shareholders meeting, the chairman may respond in person or designate relevant persons to respond to the speech.

153

Article 12

Voting at the shareholders meeting shall be determined based on the number of shares.

The shares held by shareholders having no voting right shall not be counted in the total number of issued shares while adopting a resolution at a meeting of shareholders.

A shareholder who has a personal interest in the matter under discussion at a meeting, which may impair the interest of the company, shall not vote nor exercise the voting right on behalf of another shareholder.

The preceding shares for which voting right cannot be exercised shall not be counted in the number of votes of shareholders present at the meeting.

Except for trust enterprises or stock agencies approved by the competent authority in charge of securities laws, when a person who acts as the proxy for two or more shareholders, the number of voting rights represented by him/her shall not exceed 3% of the total number of voting shares of the Company, otherwise, the portion of excessive voting rights shall not be counted.

Article 13

A shareholder shall be entitled to one vote for each share held, except when the shares are restricted shares or are deemed non-voting shares under Paragraph 2 of Article 179 of the Company Act.

When the Company holds a shareholders meeting, it may allow the shareholders to exercise voting rights by correspondence or electronic transmission. When voting rights are exercised by correspondence or electronic transmission, the method of exercise shall be specified in the shareholders meeting notice. A shareholder exercising voting rights by correspondence or electronic transmission will be deemed to have attended the meeting in person, but to have waived his/her rights with respect to the extemporaneous motions and amendments to original proposals of that meeting; it is therefore advisable that the Company avoid any submission of extemporaneous motions and amendments to original proposals.

A shareholder intending to exercise voting rights by correspondence or electronic transmission under the preceding paragraph shall deliver a written declaration of intent to the Company 2 days before the date of the shareholders meeting. When duplicate declarations of intent are delivered, the one received earliest shall prevail, except when a declaration is made to cancel the earlier declaration of intent.

After a shareholder has exercised voting rights by correspondence or electronic transmission, in the event the shareholder intends to attend the shareholders meeting in person, a written declaration of intent to retract the voting rights already exercised under the preceding paragraph shall be made known to the Company, by the same means of which the voting rights were exercised, 2 days before the date of the shareholders meeting. If the notice of retraction is submitted after that time, the voting rights already exercised by correspondence or electronic transmission shall prevail. When a shareholder has exercised voting rights both by

154

correspondence or electronic transmission and by appointing a proxy to attend a shareholders meeting, the voting rights exercised by the proxy in the meeting shall prevail.

If the Company allows its shareholders to exercise their voting rights in writing by correspondence or by way of electronic transmission, the Company shall finish the counting and verification of the votes cast in writing by correspondence or by way of electronic transmission prior to the convening of the shareholders meeting.

If the Company allows its shareholders to exercise their voting rights in writing by correspondence or by way of electronic transmission, the Company shall compile the number of votes cast in writing by correspondence or by way of electronic transmission and prepare a statement of information and disclose such statement of information in an explicit manner at the venue of the shareholders meeting.

Unless otherwise provided laws and regulations or the Company's Articles of Incorporation, resolutions agreed upon by a majority of the votes represented by shareholders present at the meeting shall be adopted. The voting rights of shareholders shall be calculated according to the voting rights of represented shares that shareholders may exercise in accordance with laws and regulations or the Company’s Articles of Incorporation. At the time of a vote, for each proposal, the chairman or a person designated by the chairman shall first announce the total number of voting rights represented by the attending shareholders.

A motion may be resolve by way of vote, or shall be deemed passed if no objection to the motion is expressed by all of the shareholders present at the meeting after the solicitation of the chairman, and shall have the same effect as if it was voted through ballot casting.

If there is an amendment or alternative to a motion, the chairman shall combine the amendment or alternative with the original motion to determine their orders for resolution. In addition, if the proposal submitted by shareholders according to Article 3 of these Rules is conflicting or amending or substituting against the proposal of the Board of Directors, the chairman shall combine the proposal of shareholders with that of the Board of Directors to decide the order for resolution. If any one of the above motions is passed, the others shall be deemed as rejected, upon which no further resolution shall be required. But where the Company allows its shareholders to exercise their voting rights in writing by correspondence or by way of electronic transmission, unless the number of votes cast in writing by correspondence or by way of electronic transmission have reached a majority vote for the motion, the passing of a motion may not occur through the "passed if no objection to the motion is expressed by all of the shareholders present at the meeting" clause.

Vote monitoring and counting personnel for the voting on a motion shall be appointed by the chairman.

Counting of the votes shall be completed at the site of the shareholders meeting. The result of the votes shall be announced and recorded on the spot.

The persons responsible for checking ballots must be shareholders and shall monitor the voting procedure to prevent the occurrence of inappropriate voting behavior, examine ballots and

155

monitor the records of the persons responsible for counting ballots. A ballot will be deemed invalid and shall not be calculated under any of the following conditions:

Where a ballot is not placed on the form provided by the Company.
Where a ballot is not placed in the ballot box.
Where a ballot is blank without any words written or without any writing expressing opinion regarding the motion.
Where a ballot is found to have words thereon other than those required to be filled in.
Where the handwriting on a ballot is too blurred or indistinct to be readable or has been altered.
Where a ballot is used by a proxy in violation of "Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies."
Where any violation of laws or regulations or voting guidelines made by the Company is found.

The standard for recognition of invalid ballots in cases of shareholders exercising voting rights in writing by correspondence is carried out in conformity with the Subparagraphs 1, 3, 4, 5 and 7 of the preceding Paragraph. In the case of doubts or disputes, the Company's verification unit is authorized to arbitrate the doubts or dispute. In addition, the standard for recognition of invalid ballots in cases of shareholder voting rights being exercised through electronic transmission is carried out in conformity with Subparagraph 7 of the preceding Paragraph, as well as in compliance with the regulations of the relevant competent authority.

Article 14

If the shareholders shall elect directors at the shareholders meeting, the election shall be handled in accordance with the rules related to election of directors of the Company and the results of the election shall be announced on the spot.

The ballots for the election of the preceding Paragraph shall be properly preserved in envelops with seals and signatures of the persons responsible for checking ballots thereon and shall be preserved for at least one year; provided that if any shareholder files a lawsuit according to Article 189 of the Company Act, such ballots shall be preserved until end of the litigation.

Article 15

Resolutions adopted at a shareholders meeting shall be recorded in the minutes of the meeting, which shall be affixed with the signature or seal of the chairman of the meeting and shall be distributed to all shareholders of the Company within 20 days after the close of the meeting. The minutes of the meeting may be prepared and distributed in electronic form.

156

The Company may distribute the meeting minutes of the preceding Paragraph by means of a public announcement made through the Market Observation Post System.

The meeting minutes shall accurately record the date (year, month, day) and venue of the meeting, the chairman's full name, the methods by which resolutions were adopted, and a summary of the deliberations and their results, and shall be preserved for the duration of the existence of the Company.

Article 16

On the day of a shareholders meeting, the Company shall compile in the prescribed format a statistical statement of the number of shares obtained by solicitors through solicitation and the number of shares represented by proxies, and shall make an express disclosure of the same at the venue of the shareholders meeting.

Article 17

Staff handling administrative affairs of a shareholders meeting shall wear identification cards or arm bands.

The chairman may direct the proctors or security personnel to help maintain order at the meeting place. Proctors or security personnel helping to maintain order at the meeting place shall wear an identification card or armband bearing the word "Proctor."

At the venue of a shareholders meeting, if a shareholder attempts to speak through any device other than the public address equipment set up by the Company, the chair may prevent the shareholder from so doing.

When a shareholder violates the rules of procedure and defies the chairman's correction, obstructing the proceedings and refusing to heed calls to stop, the chairman may direct the proctors or security personnel to escort the shareholder from the meeting.

Article 18

When a meeting is in progress, the chairman may announce a break based on time considerations. If an air-raid alarm, an earthquake or a force majeure event occurs, the chairman may unilaterally rule the meeting temporarily suspended for evacuation individually and announce whether, in view of the circumstances, the meeting will be resumed after the reason of suspending the meeting is eliminated.

Article 19

Any concerning matter that is not addressed in these Rules shall be handled in accordance with the Company Act and other related laws and regulations, and the relevant provisions of the Articles of Incorporation of the Company.

157

Article 20

These Rules shall be effective from the date it is approved by the shareholders meeting. The same applies in the case of amendments.

Article 21

These Rules were enacted on June 10, 2009.

The first amendment was made on June 5, 2012.

The second amendment was made on June 10, 2015.

The third amendment was made on June 15, 2016.

The fourth amendment was made on June 24, 2019.

158

Nuvoton Technology Corporation

Procedures for Election of Directors (After Amendment)

Amended and enacted by the Shareholders Meeting on June 24th 2019.

Article 1

To ensure a just, fair and open election of directors, these Procedures are hereby adopted.

Article 2

The candidate nomination and election of directors shall be conducted in accordance with the Company Act, Securities and Exchange Act and other relevant laws and regulations. The professional qualification, shareholding, restrictions on concurrent serving in other companies and other matters to be complied with by independent directors shall be processed in accordance with relevant laws and regulations.

Article 3

The overall composition of the Board of Directors shall be taken into consideration in the selection of this Company's directors. Each board member shall have the necessary knowledge, skill, and experience to perform their duties; the abilities that must be present in the Board of Directors as a whole are as follows:

Making judgments about operations ability.
Accounting and financial analysis ability.
Business management ability.
Crisis management ability.
Knowledge of the industry.
International market perspective.
Leadership ability.
Decision-making ability.

Article 4 (Deleted)

Article 5

The qualifications for the independent directors of the Company shall comply with Articles 2, 3, and 4 of the “Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies.”

159

The election of independent directors of the Company shall comply with Articles 5, 6, 7, 8, and 9 of the “Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies,” and shall be conducted in accordance with Article 24 of the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies.”

Article 6

Elections of directors at the Company shall adopt the candidate nomination system and procedures set out in Article 192-1 of the Company Act and cumulative voting with single name registered on the ballot. Each share shall have voting rights in number equal to the directors to be elected, and may be cast for a single candidate or allocated among multiple candidates shown on the list of director candidates.

Article 7

The Board of Directors shall prepare ballots for directors in numbers corresponding to the directors to be elected. The number of voting rights associated with each ballot shall be specified on the ballots, which shall then be distributed to the attending shareholders at the shareholders meeting. Attendance card numbers printed on the ballots may be used instead of recording the names of voting shareholders.

Article 8

The number of directors will be as specified in the Company's Articles of Incorporation. Independent directors and non-independent directors shall be voted at the same time but the votes for independent and non-independent director positions shall be separately calculated. Those receiving ballots representing the highest numbers of votes will be elected sequentially according to their respective numbers of votes. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the chairman drawing lots on behalf of any person not in attendance.

Article 9

Before the election commences, the chairman shall appoint several persons to be voting supervisors and vote counters each to perform relevant duties respectively. The voting supervisors may be appointed from among the shareholders present. The ballot boxes shall be prepared by the Board of Directors and publicly checked by the voting supervisors before voting commences.

Article 10

If the candidate is a shareholder of the Company, the electors shall fill in the name and the shareholder's number of such candidate in the column of "candidate" of the ballot. If the

160

candidate is not a shareholder of the Company, the electors shall fill in such candidate's name and the number of its identification certificate in the same column. If the candidate is a government agency or a legal entity, either the full name of the government agency or the legal entity or the full name of the government agency or the legal entity and the name(s) of their representative(s) should be filled in the column of to be elected. If the government-linked shareholder or institutional shareholder has several representatives, the name of each representative shall be filled in.

Article 11

A ballot shall be void and excluded from the votes for any candidate upon any of the following conditions:

The ballot was not prepared by the Board of Directors.
A ballot is placed in ballot boxes not prepared by the Board of Directors, or a blank ballot is placed in the ballot box.
The writing is unclear and indecipherable or has been altered.
Candidate(s) listed on the same ballot are not on the candidate list or two or more candidates on the candidate list are listed on the same ballot.
The candidate whose name is filled in the ballot is a shareholder, but the candidate's account name and shareholder account number do not conform with those given in the shareholder register, or the candidate whose name is filled in the ballot is a nonshareholder, and a cross-check shows that the candidate's name and identity card number do not match.
There are other written characters or symbols in addition to the account name/name(s) of the candidate(s), shareholder account number/number of identification certificate and voting rights allocated, on the ballot.
The name of a candidate filled in on the ballot is same as another shareholder's name but the respective shareholder account numbers or numbers of identification certificates are not indicated to identify each of them.

Article 12

After completion of voting by attending shareholders, the ballot boxes shall be opened and the votes will be counted on the spot under the supervision of the voting supervisors. The voting results, including the list of elected directors and the number of votes obtained by each elected director will be announced by the chairman on the spot.

Article 13

The board of directors of the Company will issue an elected notice to each elected director.

161

Article 14

Any other matters not set forth in the Procedures shall be dealt with in accordance with the Company Act and relevant laws and regulations, Articles of Incorporation of the Company, and relevant provisions in the Rules Governing the Conduct of Shareholders Meeting.

Article 15

These Procedures shall be implemented after approval by a shareholders meeting. Any amendment hereto is subject to the same procedures.

Article 16

These Procedures were enacted on June 10, 2009. The first amendment was made on June 14, 2013.

The second amendment was made on June 10, 2015. The third amendment was made on June 15, 2016. The fourth amendment was made on June 24, 2019.

162

Nuvoton Technology Corporation

Articles of Incorporation[3] (After Amendment)

The eighth amendment will be submitted to the annual general shareholders meeting on June 24, 2019 for approval

I. General Provisions

Article 1

The Company is incorporated as a company limited by shares under the Company Act and shall have the name 新唐科技股份有限公司 (NUVOTON TECHNOLOGY CORPORATION, hereinafter “the Company”).

Article 2

The scope of business of the Company shall be as follows:

CC01080 Electronic Parts and Components Manufacturing
CC01110 Computers and Computing Peripheral Equipment Manufacturing
CC01120 Data Storage Media Manufacturing and Duplicating
F401010 International Trade
I301010 Software Design Services
I501010 Product Designing

Research and development, designing, manufacturing and selling of the following products and technologies:

Consumer Logic IC Products
Computer Logic IC Products
Production, testing, and foundry service of 6-inch wafers

Article 3

The Company may provide endorsement and guarantee for the operational needs of the

3 This translation is for reference only. In the event of any discrepancy between the Chinese version and this translation, the Chinese version shall prevail.

163

Company.

Article 4

The total amount of the Company’s investments shall not be subject to the ceiling of 40% of the Company’s paid-up capital.

Article 5

The Company has its head-office in Hsinchu Science Park, Taiwan. Subject to the approval of the Board of Directors and government authority, the Company may, if necessary, set up branches or business offices within and outside of the Republic of China.

Article 6

Public announcements of the Company shall be made in accordance with Article 28 of the Company Act.

II. Shares

Article 7

The total capital of the Company shall be in the amount of three billion New Taiwan Dollars (NT$3,000,000,000), divided into 300 million shares, at ten New Taiwan Dollars (NT$10) each, and may be issued in installments. The un-issued shares may be issued by a resolution of the Board of Directors whenever it deems necessary. In the aforesaid total capital, up to one hundred eighty million New Taiwan Dollars (NT$180,000,000) may be reserved for issuance of stock warrants, preferred shares with warrants or corporate bonds with warrants, consisting of 18 million shares, with a par value of ten New Taiwan Dollars (NT$10) per share, which may be issued in installments. The respective amount of stock warrants, preferred shares with warrants or corporate bonds with warrants may be adjusted by the Board of Directors in consideration of factors concerning capital market and operation needs.

Article 8

The shares issued by the Company may be in scripless form and without physical certificates, but the Company shall register the shares with the central securities depositary institution.

Article 9

The transfer, registration, loss or destruction of share certificates shall be handled in accordance with the Company Act and relevant regulations. Taiwan Depositary & Clearing Corporation may request the Company to combine its share certificates in exchange for issuance of share certificates of large denomination.

164

III. Shareholders Meeting

Article 10

Shareholders meetings of the Company are of two types: regular meetings and special meetings. Regular meetings shall be convened, by the Board of Directors, within six (6) months after the close of each fiscal year. Special meetings shall be convened in accordance with the relevant laws, whenever necessary.

Article 11

Shareholders may designate a proxy to attend a shareholders meeting with a power of attorney stating the scope of authority in accordance with the Company Act and relevant regulations, promulgated by government authorities.

Article 12

Each share of stock shall be entitled to one vote, unless otherwise provided by applicable laws or regulations.

Article 13

Except otherwise provided by the laws and regulations, a resolution of the shareholders meeting shall be adopted by the consent of a majority of the votes represented by attending shareholders, in person or by proxy, who represent a majority of the total issued shares of the Company.

Article 13-1

After the Company becomes a public issuing company, the revocation of public issuance shall be reported to the shareholders meeting for resolution, and this article shall not be changed while the Company is traded on the Emerging Market Board or Mainboard of Taipei Exchange or listed on Taiwan Stock Exchange.

Article 14

In the case that the Company is held by a single government shareholder or a single juristic person shareholder, the functional duties and power of the shareholders meeting of the Company shall be exercised by the Board of Directors, to which the provisions governing the shareholders meeting as set out in the Articles of Incorporation shall not apply.

IV Board of Directors and Audit Committee

Article 15

The Company shall have nine Directors, whose term of office is three years. Among the directors there should be not less than three independent directors. Election of directors shall

165

adopt the candidates nomination system prescribed in Article 192-1 of the Company Act. All of the directors are elected by the shareholders meeting from the candidate list of directors and are eligible for re-election. Independent and non-independent directors shall be elected at the same time, but the quota shall be calculated separately. The method of candidate nomination and election of directors shall conform to the Company Act, the Securities and Exchange Act, and other relevant rules and regulations. The professional qualifications, requirements relating to shareholdings, restrictions on concurrent positions held, and other compliance matters with respect to independent directors shall conform to relevant rules and regulations. The Board of Directors may resolve to purchase liability insurance for directors of the Company.

Article 15-1

The Company, pursuant to Article 14-4 of the Securities and Exchange Act, establish an audit committee. The audit committee shall be formed by all independent directors and shall have no less than three members and one of the members shall be the convener and at least one member shall be a professional on accounting or finance. The members of the audit committee shall be responsible for performing the functions and duties provided under the Company Act, Securities and Exchange Act and other laws and regulations and shall comply with relevant laws and regulations and the Company's rules and regulations.

Article 16

The Board of Directors shall consist of the directors of the Company; the Chairman of the Board of Directors shall be elected from among the directors by a majority of directors in attendance at a meeting attended by at least two-thirds of the directors. A Vice chairman may be appointed to assist the Chairman.

Article 17

Except as otherwise provided by law, meetings of the Board of Directors are convened by the Chairman of the Board of Directors. When convening a meeting of the Board of Directors, a meeting notice specifying the reasons for convening such meeting shall be sent to each director within the period prescribed by the competent authority in charge of securities laws prior to the meeting; provided that a meeting may be convened at any time in case of emergency without written notice.

The meeting notice set forth in the preceding paragraph may be in writing or e-mail or by fax.

Unless otherwise provided by law, resolutions adopted at a meeting of the Board of Directors must be approved by a majority vote of the directors being present, who shall represent no less than half of the total number of directors. Directors may designate other directors as their proxies to attend the meetings of the Board of Directors; provided that each director may act as proxy for one other director only. The Board of Directors shall meet at least once every three months.

166

Article 18

In the case where the Chairman of the Board of Directors is on leave or otherwise unable to perform his/her duties, matters conducted on behalf of the Chairman shall be handled in accordance with Article 208 of the Company Act.

Article 19

The Board of Directors is authorized to determine the remuneration of directors based on their contribution and involvement in the operations of the Company and by reference to standard compensation levels in similar industries both domestically and internationally.

Article 20

The authorities of the Board of Directors are as follows:

Review operation principles, and long term and short term development plans.
Review and implement annual business plans.
Approve budget and review the results at year-end;
Propose to increase or decrease the Company’s capital.
Propose profit distribution or a plan for making up losses.
Review, approve, amend and terminate material contracts and contracts relating to procurement, transfer, licensing or technical cooperation of important technology and patents.
Propose and review plans in connection with using transfer as security, sale, lease, pledge, mortgage, or other disposal of all or a substantial portion of assets of the Company.
Propose to revise the Articles of Incorporation.
Review and approve the Company's organizational structures and important business rules.
Decide the establishment, reorganization, or removal of branch or business offices.
Review capital expenditure projects whose values are over NT$100 million (included). The Chairman of the Board of Directors is authorized to review and approve capital expenditure projects whose values are below the aforesaid amount.
Appoint or remove corporate officials at the level of vice presidents and higher.
Convene shareholders meetings and make business report.
Approve the Company's investments or transfers of shares whose value is above

167

NT$100 million (included). The Chairman of the Board of Directors is authorized to review and approve investments or transfers of shares whose values are below the aforesaid amount.

Appoint or dismiss auditing certified public accountant of the Company.
Apply for financing, providing guarantees, acceptances and credit extension with, and raise debts from, financial institutions or third persons, whose value is above NT$100 million (included). The Chairman of the Board of Directors is authorized to review and approve those whose values are less than the aforesaid amount.
Decide the amount of endorsements, guarantees, and acceptances to be made in the name of the Company.
Examine and approve major business transactions between relevant parties (including affiliated enterprises).
Perform such other duties and responsibilities prescribed by law or authorized by the shareholders meetings.

When it is necessary and legally permissible, the Chairman of the Board of Directors may review, approve, or implement the matters listed in aforementioned paragraphs before reporting to the Board of Directors. When used for the same purposes, the matters specified in items 11, 14, and 16 of this Article shall not be divided for contracting or applied for, or implemented without prior approval.

Article 21 (Deleted)

V. Managers

Article 22

The Company may have chief executive officer, president and several vice presidents according to the resolution of the Board of Directors, and their appointment, removal, and remuneration shall be handled in accordance with Article 29 of the Company Act. The Board of Directors is authorized to determine the duties and functions of said managers or the Board of Directors may authorize the Chairman of the Board of Directors to determine the duties and functions of the said managers.

VI. Accounting

Article 23

The fiscal year for the Company shall be from January 1 of each year to December 31 of the same year.

Article 24

168

After the end of each fiscal year, the Board of Directors shall have the following documents prepared: (1) business report, (2) financial statements, and (3) proposal for allocation of surplus profit or making up losses, and submit the same for recognition at the shareholders meeting in accordance with the legal process.

Article 25

If the Company has net profit, 1% or more of the net profit shall be allocated as remuneration of employees and 1% or less as remuneration of directors; provided that if the Company has accumulated losses, the Company shall first set aside an amount for making up losses.

The distribution of employee and director remuneration shall be reported to the shareholders' meeting.

The Company may purchase its shares for transferring such treasury shares, issue employee - ' options, provide pre emptive right for employees subscription upon issuing new shares, issue new restricted employee shares, and distribute employee remuneration, to those eligible employees of the Company’s controlling or subordinated companies who meet certain criteria, which shall be determined and resolved by the Board of Directors.

The directors entitled to director's remuneration and relevant matters shall be handled in accordance with relevant laws and regulations and be determined by the Board of Directors.

Article 26

If the Company has pre tax profit at the end of the current fiscal year, after paying all taxes and covering all accumulated losses, the Company shall set aside 10% of said earnings as legal reserve. However, legal reserve need not be made when the accumulated legal reserve equals - the paid in capital of the Company. If there is any distributable profit after aggregating the balance of the above and undistributed earnings of previous years or after aggregating the losses of the current fiscal year and undistributed earnings of previous years, special reserve shall be set aside or reversed according to laws and regulations or rules of competent authority. If there is any remaining amount, after setting aside a special reserve or retaining an amount as undistributed earnings, the Board of Directors may submit a proposal for allocation of the remaining balance and the accumulated undistributed earnings to the shareholders meeting for resolution on distributing bonus and dividends to shareholders.

The Board of Directors shall be authorized to distribute the profit, the legal reserve and the capital reserve mentioned in the preceding paragraph in cash upon resolution by a majority vote - at a board meeting attended by two thirds or more of the directors, and shall report the same to the shareholders' meeting.

The Company's dividend distribution policy is made in accordance with the Company Act and the Articles of Incorporation in consideration of factors including capital and financial structure, operating status, earnings, industry characteristics and economic cycle. The dividends shall be distributed in a steady manner. Distributable earnings may be retained undistributed or

169

distributed in cash dividend or the combination of stock dividend and cash dividend, so as to maintain sustainable management and development. With respect to distribution of dividends, in consideration of future operating scale and cash flow requirements, no less than 50% of the remaining amount of the net profit after tax of the current year, after covering the accumulative losses and setting aside the legal reserve and the special reserve, shall be distributed to shareholders as dividends, and the percentage of cash dividends to shareholders shall not be less than 10% of the total amount of dividends to shareholders. The conditions, timing, amounts and types of retained earnings and distribution of dividends may be adjusted on proper occasions based on the needs to deal with changes in economic and industrial trends and in view of the Company's future development needs and profitability.

VII. Supplementary Provisions

Article 27

Any matters not provided for in these Articles of Incorporation shall be handled in accordance with the Company Act.

Article 28

All kinds of rules and operational regulations of the Company shall be otherwise made.

Article 29

These Articles of Incorporation were enacted on March 14, 2008.

The first amendment was made on September 1, 2008.

The second amendment was made on November 17, 2009.

The third amendment was made on June 10, 2011.

The fourth amendment was made on June 5, 2012.

The fifth amendment was made on June 10, 2015.

The sixth amendment was made on June 15, 2016.

The seventh amendment was made on June 12, 2018.

The eighth amendment was made on June 24, 2019.

170

AI assistant

NTC — AGM Information 2019

52438_rns_2019-12-16_13f468c9-00b3-4b0e-b628-cdf524b40d68.pdf

(English Translation)

Nuvoton Technology Corporation

2019 Annual General Shareholders Meeting

Agenda Handbook[1]

Table of Contents

Meeting Procedure and Agenda of 2019 Annual General Shareholders Meeting of Nuvoton Technology Corporation

Matters to be reported:

I. To report the business of fiscal year 2018

II. To report the Audit Committee's review of 2018 final accounts

III. To report the distribution of the remuneration of employees and directors for fiscal year 2018

IV. Other matters to be reported

Matters to be recognized, discussed and election of Directors

Motion III

Motion VI

Voting by Poll for Motion No. 1~4 of the above recognized and discussed matters:

Election results ：

Motion VI

Voting by Poll for the Above Motion:

Other Matters and Motions

Adjournment

Attachments

< Attachment 1>

Nuvoton Technology Corporation 2018 Business Report

Financial Performance

Products, Markets and Technological Developments

Honors and Awards

Enterprise Business and Expectations

NUVOTON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

NUVOTON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

NUVOTON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

NUVOTON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

NUVOTON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

NUVOTON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

NUVOTON TECHNOLOGY CORPORATION

BALANCE SHEETS DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

NUVOTON TECHNOLOGY CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

NUVOTON TECHNOLOGY CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

NUVOTON TECHNOLOGY CORPORATION

STATEMENT OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

NUVOTON TECHNOLOGY CORPORATION

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars)

NUVOTON TECHNOLOGY CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

< Attachment 2>

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Validity of sales revenues

Other Matter

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Validity of Sales Revenues

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Auditors’ Responsibilities for the Audit of the Financial Statements

Notice to Readers

NTC AGM Information 2019

Election results `：`